HELOC on primary resident to purchase rental properties

[Jacob Yang]

Hi,

I'm new to RE investing and need some guidance from BP experts. I plan to apply for HELOC on my primary resident, which I plan to use for down payments for rental properties. (yes, my goal is to purchase multiple properties!) I plan to fund the rest of purchase price using mortgage on each of those properties.

1) Should I try to get max HELOC amount (max 80% LTV) even thought lower amount (e.g. 50% LTV) might be good enough for now? I love the idea of having extra credit available in case I need for purchasing multiple rentals, but will this have negative impact on my ability to get mortgages on rental properties.

2) I see that I can get tax deduction for the interest payments on HELOC amount used for investment properties through interest tracing rule. However, all the lenders that I spoke to don't provide a way to track different draw amounts and associated interests separately unless I use fixed rate locking option, which I'm not a big fan of. This may not be a problem if all HELOC amounts are used for down payments for multiple investment properties, but what if I want to draw some amount for personal spending, which is not tax deductible? What is the best way for me to track different draw amounts & interest payments from the same HELOC account?

Thanks!