New HELOC/BRRRR strategy. Thoughts?

[Micah Watson]

I want to run a strategy by you.

I have one single family rental and one single family home, each with a bit of equity. I’m thinking of 

1) tapping into the equity via two HELOCs(one of each property) to purchase a third property. Then

2) Upon purchasing the third property, taking out a third HELOC on the purchase price of that property to fund the rehab to bring it up to its proper ARV. And then

3) Upon rehabbing, rent it out and finance it with a conventional mtg large enough to pay off all three HELOCs before any adjustable rates are hiked. And finally

4) repeating the process using one or more HELOCs on any of the three propertys

It seems speculative, but is ultimately and completely dependent on the numbers of the deal. Has anyone tried something similar?