Using HELOCs to finance 5 condos

[Adam Demchik]

I would appreciate some opinions on my strategy below to purchase 5 condo units. First the numbers:

Approx. purchase price - $35,000 each
Type of units - 5-10 years old, 2 bed 2 bath
Rental value - approx 750 per month (satisfies the 2% rule)

I don't want to deal with getting a traditional mortgage so my plan was to purchase the first unit with cash and then take out a home equity loan/line for 80% of the value of the condo (28,000) and use this plus $7000 of my own cash to purchase the next one. I would repeat this process for all 5 units. In the end after purchasing all 5 units I would have a total cash outlay of $63k and a yearly gross income of $45k. My return on cash would be about 30% after applying the 50% rule and paying the mortgage payment.

Please let me know your thoughts on the above plan. thanks!