Financing & LoansQuestion 20
Can I Use a HELOC to Buy Another Rental Property?
Yes — a HELOC on your primary residence or existing rental can provide the down payment or full purchase price for another Houston investment property.
Using a HELOC is one of the most popular strategies Houston investors use to scale their portfolios without saving up cash for each new down payment.
- Primary residence HELOC: Easiest to obtain. Borrow up to 80%–90% of your home's value minus your mortgage balance.
- Investment property HELOC: Harder to find — fewer lenders offer them. Typically 70%–75% LTV max.
- Strategy: Draw from the HELOC for the down payment on a new rental, then repay the HELOC with rental cash flow over time.
- Costs: Variable rates (currently 7%–10%), low or no closing costs, interest-only payment option during the draw period.
Bottom Line
A HELOC is an excellent tool for accessing equity quickly to fund Houston rental purchases. Just ensure the combined debt service (HELOC + new mortgage) still leaves you with positive cash flow.