Looking to expand portfolio and buy second property

[Mitch Mercer]

Hi all! First timer here posting in bigger pockets forums, been following for awhile now. I'm living in calgary AB canada. 

I bought my first property in 2021 which I then turned the property into a rental and recently made some renos increasing value. Units been cash flowing ever since i rented it. The market in calgary has exploded and I have amassed a large amount of equity I could access. I'm trying to think about my next step, I know I would like to buy another property, just unsure if I should sell previous and potentionally have enough capital to purchase 2 or refi / line of credit against equity to fund second property. Is there any tips or advice anyone has for a newbie looking to increase his portfolio!

[Marcondes Franco Da Silva]

Quote from @Jacob St. Martin:

Hello Mitch, 

Congrats on your success! I would recommend looking at the return on equity in the different scenarios. Return on equity is basically taking the return on investment formula and replacing the denominator with your current equity rather than the money invested. This will show you if your money is working as hard for you as you want it to be! Then you can look at the ways to access that equity and deploy it into other deals and look at your new ROE in each scenario. It is hard to give more specific advice than that because the right answer depends on the numbers and what purchase opportunities you have. 

Feel free to reach out if you have any questions! 

Agree with the comments made by my fella investor. When you are running your scenarios don't forget to update the proforma for your current property  with the new mortgage payments to have a clear idea if you still would be on the positive cash flow position. If you wouldn't, evaluate the numbers carefully to understand if your decision, however it is, is align with your strategy and goals.