Second mortgage to finance purchase

What I am looking at doing is refinancing my house at a lower rate,(6.0-30 yr fixed)and pulling enough money out to pay off all my bills, and have enough to put down on a forclosure and make the repairs too, So if I pay off all my bills I save enough to make the house payment if I have to, but I plan on renting it out until the market turns.

good or bad idea?

HELOCs are a good resource for financing investments. You can write off the interest in the same way you can write your 1st mortgage off. I typically use my HELOC on my primary residence for repair costs on my fix-up properties. Once the property flips, I can pay down the HELOC so that I can repeat the process on the next investment property.

I want to add to this. I did a search and came to this. I know its old but it needed a few updates.

One of my deals I utilized a 203b loan. below is a blurb that is from the FHA website.

"FHA Loan Section 203(b) is the most popular FHA program. You may use this program to purchase new or existing 1-4 family homes, condos or townhouses, in both urban and rural areas. A section 203(b) fixed mortgage may be repaid in monthly payments over 15 or 30 years.

Interest rates on FHA loans are generally slightly higher than market rates, while down payment requirements are lower than conventional loans. Down payments can be as low as 3.5 percent. In many cases, closing costs can be wrapped into the mortgage."