So I want to ask a few things and this might get a little long. So I have my second deal coming along. Well in all reality it will be my first. I like to consider our first Forclosed home that we fixed up and now have a ton of equity in as my first. That's what got me really interested in real estate. Anyway I have an off market deal coming up. This particular house does not really meet the criteria I have set for myself for the type of house I'm looking to buy and hold. On the other hand this is a premium peice of property. In a very good neighborhood. I will have the down payment on this property by the time the owner will move. My questions and concerns are as follows I see a lot of properties going up around me that are very good deals , i think, that generally meet about the 2%. I feel like I'm missing out on the action around here. I'm just ready to make a move. Would you suggest taking out the equity in my home to purchase around 3 houses that are close to turn key, obviously putting up a reserve for each house. I was thinking about 5 thousand for each house. Does that sound good? Do you feel I am jumping in to fast going from no rentals to a few. Should I save my HELOC for the very last option. I feel I have a good understanding of what I need to do. What are some other things to consider from your POV that a novice can't see yet. I plan on using the calculators to do some research and present my work to my wife this weekend over dinner. All feedback is really and greatly appreciated. Thank you all!!!
Before you make some drastic moves, I would try to figure out why there are so many good deals coming out on the market like that. Is there something happening to the neighborhood? In terms of jumping in too fast...I always say go big if you feel confident in your abilities. Figure out what the worst case scenario is. If you feel the worst case is that you could lose all the money and you are not ok with that, maybe you scale back. However, if this is money that you can easily replace after a while, then what's the risk. Always balance your risk and reward.
You should start by pulling the dead equity out of your first property. It is killing your true cash flow and should be forced to earn it's keep by using it as minimum DPs on more properties. Dead equity does not make money it cost you money in lost opportunity value. You will never grow if you do not use your money efficiently.
Establish a HELOC on your home and use it as your revolving reserve fund.
As far as I know the community is not doing bad. It has a big electric company near by that has been and should be there for a while due to some very new construction. Also they are putting an amazon warehouse in very soon. Im going to have to reach out to my local people and check around see if I can find any useful information. Also as far as the risk of losing all my money I dont really see that happening. So maybe I will do a risk assessment and see how it pans out
Thanks for the advice. I am seriously considering it. I think it will put me in a good position.
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