Updated about 4 years ago on .
Primary Residence Equity Build
I am currently looking for some advice on different possible routes I can go with my current small portfolio. I am looking to use the full amount of equity I currently have to invest in cash flowing assets. My main roadblock is deciding the best way to maximize my equity before trading it for monthly cash flow. Here is a summary of my current situation, followed by my main questions and/or concerns. TIA.
Summary:
- I bought my primary residence off market, distressed, in August 2020 for $105K. Within the next month I will have all the major rehabs completed bringing the approximate value of the home to $175k. On top of the current rehab in the home, I have the opportunity to buy 22 acres of woods connected to my property for $50K which would then bring the value to $250K (local comps).
- I also own a duplex free and clear that is worth $60K and will bring in $1,200/month total before expenses.
- Opportunity on the table, a duplex with an all in cost of $40K and ARV of $85K
Questions / Plans / Thoughts:
- I first need to decide what the best route is for my primary residence. If I were to get a HELOC based on the $175K value could I use the equity to buy the land and then get another reappraisal and increase the HELOC to reflect the new value?
- I also wanted to use my equity from my first duplex to purchase the second duplex so I can combine the two investment properties equity for further possibilities. Is a HELOC the best route to achieve this or is there anything else I should consider?
- Lastly, once I have finished the rehab on my primary and added the 22 acres and combine that with the two duplex’s I own, I will be looking at $160K-$180K in equity to invest for my cash flow. Is it better to take that equity and invest into multiple projects or just one larger project?