Thoughts on using a HELOC on a primary residence for an investment property? Currently considering using my $150k LOC with a 7.7% APR. Investment property is still projected to cash flow after all debt service on commercial loan/ HELOC and expenses.

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Is the HELOC fixed rate or variable? Do you have reserves above the HELOC in case something goes wrong?

Is the rental property turn key? Or value add? How long would it take you to pay off the HELOC? How much vacancy expense / repairs / CapEx are you building into your underwriting before it “cashflows?

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Appreciate the insights into risks and helping me pressure test PM1 - I’ll certainly incorporate into my analysis.

Also I definitely appreciate having my dad for financial support and acknowledge it’s not a luxury afforded to many. But as an immigrant/1st generation my dad and I worked incredibly hard for the modest financial security we have.

I’m a fan

I have several rental properties, and in my opinion, you have to draw the line somewhere with regards to borrowing money to invest. I do not feel comfortable taking out a heloc on my primary to fund rentals, especially at current interest rates. Only if it was a short-term (say 3 to 5 months) loan that I know I can pay back soon.
All depends on your risk tolerance.

Agreed. I’m all for leverage but not against my primary residence.

So you're risking your home for the chance an investment property you can't afford otherwise will have everything go perfectly or mostly perfectly?

Yeah that sounds like a horrendous idea. However couple questions if you still plan to do it. 1. Can you afford the loan payment if the property doesn't cash flow when you expect or there's massive unexpected additional expenses? 2. Why can't you get a business loan?

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