Cash purchase using LOC, what exit strategy?

[Denise Mayo-Walley]

Hello BPers,

I currently have one buy and and hold investment property and I am eager to acquire a 2nd. I met my Realtor today and saw a property that fits my criteria but is also in great shape and therefore can be listed for rent almost immediately. The market in my area is insane and I do not want to miss out on this property which meets the 1.2% rule (not unusual for my market).

So, here's my question. I have access to a LOC that uses my investments as collateral as well as a HELOC that I can get access to very quickly. This will afford me the opportunity to place an all cash offer with quick closing. Now, here is where I get a tad confused. So after closing, then what? I have spent most of the evening reading through old forums, Google-ing and trying to understand my options and figure ways to determine which option is best.

I was thinking I could 1) use the LOC to purchase the property 2) do a refi of sorts after closing and pay off the LOC (amount will be less because of the max LTV being somewhere around 80%) then 3) use my cash to pay off the LOC.  This way I can end up with a conventional 30 year loan and will have used my LOC to get a better price on the property.  However, doing it this way will not allow me to use my cash to buy more properties as I will essentially still be putting 20% down on the house.

Does that plan sound doable and is it a smart thing to do or do I need to purchase Brandon's book on No and Low Money Down strategies to make my cash go farther? lol

Thank you for your time!