New BiggerPockets and real estate investing

[Anahi Beltran]

Hi, everyone! I’m new to the forum so I am still figuring it all out! I’ve been listening to the real estate and money podcasts for months. 

I have been saving for a down payment for my first rental. I currently have a mortgage on a 3-bed 2.5 bath house in Boise, ID. The market here has risen significantly since I purchased my home 3 years ago and appears to be continuing to rise. I have about $120k in equity on my home. I'm considering opening a HELOC to expedite purchasing my first rental. What is everyone's thoughts on doing this?

Without a HELOC, I could have a solid $40k downpayment in 3 years. I'm estimating that my first rental will be around $200k because that's should afford a 1 or 2 bed townhome or house. I estimate that rent would be around $1,000-1,200. It would reach the 1% rule because of the market here, but it's 0.5%.

Would it be smarter to wait and see if home prices fall in the next few years or jump in and get a HELOC to buy now? I figured that any decreases in home prices would be offset by rental income, but that can be a gamble. Any opinions?