Use Heloc for down payment or do 100% Loan?


I am just getting started i real estate investing and wanted ideas one what would be the best route to go. I am in Surburban MD outside of DC. I have about 85k to work with (HELOC) . Don’t really need cash flow at this time as I am young and have a decent income (100k). I was thinking of a buy and hold strategy with town houses in good neighborhoods (220k to 250k each) I am trying to decide if I should get maybe 2 of those with 10% down on each and use a cash flow arm or go 100% financing and refi to a cashflow in 6 months -1 year depending on appreciation. Any ideas would be appreciated.

Don’t lien to much up against your primary in order to get investment properties. I would opt for 100% or as close to it as possible due to the fact that the difference in payment each month will be easier to digest than large sum out of pocket(heloc) expense. I would much rather have a $100 negative cash flow each month(due to higher rate) than have to come up with an additional $10 to $20K or more at closing. Keep it for the next opportunity that comes your way. It’s like a mutual fund spread the risk over several homes instead of putting all you eggs in one basket. Some will yield positive cash flow some will be negative but all in all at the end of the day if you break even or even if you have a tolerance for some negative cash flow (sound to me like you do) you now have a larger net worth and the opportunity to make more money will be there.
***I am still a firm believer in not putting to much risk against the primary!!!

I absolutely agree that you should avoid using your primary as much as possible. I did it to get started, but it is a lot of risk. I would use a little as necessary for a down payment and get as much loan as you can. The less of your own money you have to use the better.