HELOC + Hard Money... good/bad?

[Nik Lavoie]

My wife and i are currently living in one side of a House Hack in Worcester, MA (about an hour west of Boston) and have access to 125k HELOC. We recently had our first child and are planning on moving into a single family home in the next year or so, but I am dead set on growing our rental portfolio on the side once we move out of the Duplex.

Considering our life plans and current situation, what is the best way to utilize this HELOC to grow our rental portfolio? one method i have heard is the HELOC+Hard Money combo, then refinancing out and repeating. is this something anyone has experience with? what other methods are out there that people have had success with? all ideas welcome!!

one note is that we would like to stay within MA for our investing for now, at least until we gain more experience. 

Thank you!!!

[Colin Kelly-Rand]

@Nik Lavoie

Hi Nik

What is the cost of your prospective property?

Worcester tripledeckers appear to range from 500k to 800k. Typically banks lend 80% of acquisition, and you would want to have a few months of mortgage reserve left over, ($25k?), the most you could put down is 100k, so a max purchase price of $500k. 

Part if your analysis has to be how you payback the line of credit (and what its costing you). Is it 8%+ interest rate ? 

Also a buying a single and having a baby is adding a lot more carrying cost. Why not another house hack? Is living in a two or three family so hard. 

I moved from a triple in Dorchester to a triple in Newton. Still hacking (with a better school system.)