Buying Houses Cash then using a HELOCs to buy More

[Joseph A Henke]

Hi Everyone!

I am a real estate agent in the in the NW Chicagoland area. I work with many investors and I am ready to start investing in rentals myself. I am interested in the Rockford, IL area for the low prices and decent rental rates. This year I plan to buy 2-3 houses for 50k or less a piece then use HELOCs to recycle the money and buy more. Are there any holes in this strategy that I am not considering? I can't qualify for a bank loan until I am two years in the agent business so this is why I plan to leverage in this way.

[Joshua Janus]

This is a great option! Using HELOC's to purchase additional properties to increase your cash flow is a common strategy. I would also look into the requirements of a DSCR loan as they are much less stringent than conventional loans.