Is $40K more even going to help me?

3 Replies

Long story short... ya right.

I am ready to invest and have $18K cash and a primary residence with $70K+ equity. Well $70K if I sell it and become homeless.

I can refi with cash out getting $42K (80/20) and a new mortgage of $900/month.

My problem is if I eventually rent my house at $1200/month with a mortgage of $620 I will realize $500 monthly cash flow.

If I refi then only $200 cash flow.

What I am looking for input on is if there are more investment opportunities with $60K than $18K.

Sounds like a no brainer to me too but...

Still not enough to pay cash for a property and with $18K I can do Conventional

(5% down owner occupant) or Hard Money Loan. 

With $60K I can also do Conventional and Hard Money just more comfortably but add to it the opportunity to do a 20% down conventional and not move from my primary.

Should I keep the greater cash flow or move forward with the $18K and house hack a couple of properties and build up to being able to purchase with cash in the future.?

My overall plan is to replace enough of my income to leave the 9-5 stress but in my area there seems like more profit from flips then rentals. I figured I would decide which way to go as I find properties.

Thanks in advance,


@Blaine Tyndall , if that house you're living in would be a good rental (you gotta look at it critically) thenI would think the best move is to convert it to a rental and go buy new primary residence with FHA 3.5% down. Make sure it's modest and would also make a good rental in a couple of years. Maybe take a look at 3.5% with PMI or 20% down without as well.

You don't want to leverage as much as you can.  You want to leverage as smart as you can.

"You don't want to leverage as much as you can. You want to leverage as smart as you can."

Yes Dave I was feeling a little nervous about putting it all out there. Maybe if it was enough to fund an all cash deal I would have felt better.

It will take a bit longer to find a FHA or conventional deal that will 1/qualify and 2/have some room for sweat equity. A plus is that it will also give me a year of landlord experience for my next purchase and the banks or lenders will accept rent on my first house as income.

@Blaine Tyndall

I would sell the house. Take the 70k and the 18k you have saved up to invest.

I know you said you would be homeless, but why not rent?

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