Home Equity to Purchase Investment Property - Good Idea?

[Brandon Seider]

Hello. As the title implies, I'm considering the idea of using a HELOC to purchase a first investment property. Any thoughts on this strategy?

[Travis Timmons]

A HELOC is a great short term debt instrument. If you don't have a plan to pay it off within a couple of years or force equity to refinance and knock out the HELOC, don't use it.

It's good for flips, BRRRRs, or a place holder if you find a screaming deal that you can't pass up until you get a big bonus or increase in income; however, it's not ideal as a down payment or purchase on a standard buy and hold. You're likely looking at close to a 100% financed property with at least part of it on a variable rate in that situation.