What is the best way to utilize a HELOC for buy and hold purchase

[Adam Frantz]

My wife and I have purchased our first duplex out of state using money from a cash out refi. The property is stable and income producing with reserves attached. Rather than doing the long haul approach of saving up enough money over the next couple years to have enough to buy another property, I am considering using a HELOC on our primary residence to fund the next deal. We have considerable equity (about $350k) since we bought before the big upswing.

My questions then become, what is the best way to underwrite a purchase with a heloc (do you add in the heloc interest rate on top of what every other money we are using to buy the property)? Also, is it best to just take out enough for the down payment and repairs and let a bank handle the rest or buy more equity using the heloc money to hopefully get more monthly cash flow from the rental to pay down the heloc?

Thank you so much!

[Kerry Noble Jr]

I dont know how comfortable you are with investing long distance.....but with 350k......you could purchase in cash, long distance, and then refi into long term financing

for instance you could find a property in STL for 150K and under in cash.....with good cashflow.....and finance into long term financing.....but use the cash as leverage into better deals....just a thought