Real Estate

HELOC as Down payment for Rental Property or Flip in Ontario

  • Last Updated:
  • Aug 19th, 2021 2:56 pm
Newbie
Jan 2, 2021
34 posts
24 upvotes

HELOC as Down payment for Rental Property or Flip in Ontario

I am looking to borrow against the appreciation of my primary residence in Southwestern Ontario and to take out a HELOC to use as a down payment for a rental property or a flip. My main concerns are that in the case of a rental it would likely not be cash flow positive (or even neutral) due to the high property costs/stagnant rent prices along with the HELOC/mortgage interest.

In terms of a flip I do have personal experience in contracting and renovations however I think there is a real risk of prices dropping in 6 months to a year due to rising interest rates and people being forced to move back to the GTA for work. I am worried that if I try to flip, I may end up at a loss owing against my primary residence which doesn't sound like the best idea.

For anyone who has done something similar in the past, please let me know how it went and if it is a good idea.

Thanks!
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