Well, I didn't turn my mortgage into a HELOC, I got a HELOC from a completely different bank than my mortgage is through. They are completely separate, except for the fact that the value on my mortgage had to be determined before I knew how much of a HELOC I could get.
But yeah, I used the money in my HELOC to put a downpayment on a rental property. People all over the city have done it, according to my mortgage broker.
I know fotze mentioned before that he thought it was illegal to use borrowed money to purchase a property, but that just isn't the case. People have been doing that for years and years. My buddy in the office in here sure didn't use his own money to buy 13 properties.
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