Am I Overlooking Anything
Hello Everyone,
Wanting to get some input in our overall plan. Wife and I own a home in Richardson, TX. Currently appraised at ~414k, with ~200k equity, more or less. We used a conventional loan, still owe ~150k. Credit scores are in the 750s or higher, we have fairly well payed careers. We've entertained the idea of getting into real estate investing, I proposed the following plan with my limited knowledge:
Step1: Move to a bigger house to accomodate our bigger family (2 kids) price range 400k-550k, use a VA loan for this second home to minimize downpayment, I have 10% disability so no funding fee. We have ~150k saved up, but I think we should not use a lot of our saved up cash in the downpayment, please continue reading as to why.
Step2: Rent out our current home, I don't expect much cashflow out of this house, probably would break even, but the house should continue to appreciate (assuming no crash).
Step3: As soon as we can, after moving into our second home (unsure of exact timeframe), use a portion of our saved up ~150k to get a third, cheaper home in Garland TX using a conventional loan and rent it out, plan would be to use this home for some cashflow. So two rentals in a short amount of time, plus our new primary home for a total of 3 properties.
I realize property taxes would increase on our current home as veteran and homested exemptions would no longer apply to that house. Does this sound like a doable plan? Any big potholes I should look out for, or something I may not have considered?
Secondary plan is to stay in our current home and buy cheaper condos/houses with conventional loans using our saved up 150k. I think my first approach would let us grow quicker, two rentals in relatively short time, but maybe buying cheaper properties that have more cashflow potential makes sense?
I welcome any input, thank you!