Using a HELOC to Invest in Real Estate: Smart or Risky?

By Wayne Hillier, Real Estate Investing Masters

June 4, 2025 | Edmonton, Alberta

There’s this moment when a homeowner turned investor discovers their HELOC. Suddenly, they’ve got $100K in equity they didn’t know they could touch, and it feels like a cheat code.

But here’s the truth: using a HELOC isn’t a strategy. It’s just access to money. What you do next is where investors either build wealth or bury themselves in debt.

Let’s get this straight.

The HELOC Isn’t the Plan. It’s Just a Tool.

Too many people think the existence of a HELOC means they should be investing. That’s backwards.

A HELOC doesn’t make a bad deal good. It just makes a bad decision faster and easier.

Before you borrow a single dollar, ask:

Can this property support the added cost of borrowed money?

Not in five years. Not "if the market goes up."

Right now, today, with today’s interest rates and real expenses.

Add the Interest Before You Dream About Cash Flow

If you’re pulling $80,000 at 7% interest, your HELOC is costing you $466 per month in interest. That’s not theoretical. That’s real money due every month, whether your tenant pays rent or not.

So ask yourself:

Will this property cash flow after that $466 is deducted?

If it won’t, don’t do it.

If it barely will, still don’t do it.

The "Infinite Returns" Trap Is Dangerous

There’s a trend where people brag about “infinite returns” because they didn’t use their own money. It’s misleading.

You did use money. You just borrowed it against your home.

It’s still debt. You’re still responsible. And if the property doesn’t perform, the risk is real and it’s personal.

You don’t get infinite returns. You get infinite responsibility.

Use the 5% Rule™ to Stress Test Your Deal

I created the 5% Rule™ to help investors determine if a rental property is truly sustainable, especially when using borrowed money.

Want to learn how to apply it to HELOC-funded deals?

👉 Order the book on Amazon to get the full framework and start using the 5% Rule™ in your investing.

Bottom Line

A HELOC is only smart when it backs a smart investment.

It doesn’t replace strategy. It doesn’t replace math.

Use it well, or not at all.

Listen to Today’s Episode:

Real Estate Investing Morning Show – Hosted by Wayne & Gabby Hillier

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Wayne Hillier - Alberta Real Estate Investing Expert

About the Author

Wayne Hillier is one of Canada’s trusted experts in real estate investing education, specializing in Alberta’s thriving markets. Based in Edmonton, Wayne has over a decade of experience building a high-performing rental portfolio and coaching investors to achieve strong cash flow, sustainable wealth, and creative financing success. As co-founder of Real Estate Investing Masters, Wayne is a respected real estate investing coach and mentor, dedicated to helping Canadian investors confidently scale their portfolios. He is also the host of the Real Estate Investing Morning Show, where he shares daily strategies and insights for mastering real estate investing in Canada.