HELOC For Down Payment

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I have a 31k HELOC @ 4.75% on a rental. No cost to me. Cash-Out-Refi is 7k closing cost for only 17k. Don't want to bother.

My plan is to use the HELOC as 20% down for a Conventional Investor Loan to acquire my 3rd rental. I would cover the 6-8k closing cost on the Investor Loan. They would factor in all rental income which was both rented recently in past two months.

My day job is 50k/year. My two rentals are cash flow positive. One at $569/month, the other $700/month. Both figures after expenses, but before budgeting for repairs/vacancies. I save it all in their respective accounts for now and don't blow them away.

Only other loan besides the two mortgages is a 28k 401k loan used for down payment on #2.

Depending what angle you want to look at it... I would not be able to afford the 3rd house with my day job @ 50k/year. With rental income from all 3, I would be able to cover 3rd house and increase my total rental income by 400-500/month.

Any road blocks I should be aware of with this approach? Any way to make it better?