Beginner. How to come up with real estate investment strategy

[Heidi W.]

Hello All,

I have a single family home that my family and I are currently living in. We are considering selling the home in 2018 and investing the equity money (approx. 350k) into out of state single family home rentals. In order to do this, my family would have to rent a house to live in ($4,000/month). Our goal is to have assets for long term benefits as well as get some serious cash flow so that we can eventually buy our dream house in the Bay Area. What is the best strategy for this type of REI? We are thinking about using our line of credit to purchase a couple of residences before selling our house. Would the cash flow be worth it? Seems we would need 10+ residences to get a decent cash flow. Can we achieve our goal with single family? Or would multi family be more efficient? We would like some advice from successful REIs on what would be a killer strategy to make the most of our money for the short term and long term. Thanks in advance!

[Account Closed]

@Heidi W. I am not sure what your current mortgage payment is, but if are planning on renting for $4,000/month then may I suggest a better plan? 

Don't sell. Get a HELOC and tap into half of that $350K. US Bank goes to 90% LTV on primary residences. You should be able to access around $175K. Put that to work somehow. Maybe find an accredited fund with a solid sponsor that can get you 20% IRR passively. Or buy a small multi family in the Bay Area. You should be able to earn 10% COC within 1 hour's drive.

Keep your money local where you can watch it grow. You made that money here.. why watch it wither away on a risky, long distance investment that you will have very little control over?