Advice For Rentals After My First Flip
Hey Everyone,
This is my first time posting on BiggerPockets but I have heard good things. I have been doing a lot of research but have not been able to find the answers I need.
I recently got done with my first flip. I was very lucky because I did not really know what I was getting myself into.
I bought the house for $150k and it appraised for $200k before I did any work. I should have just sold it then because after putting $35k into renovations, it only sold for $230k.
After its all said and done, I took home $40k.
Here is what I am having trouble deciding: whether to flip another one or start buying rental properties.
I am 25 years old and even though planning for the long-term is probably smarter, I want to grow quickly.
I have read countless articles on how to acquire rental properties quickly and they all contradict one another.
However, the one strategy I keep reading about is the HELOC strategy. From what I make of it, I can open up a line of credit on the equity of my primary residence.
Let's say I bought my house for $50k and it appraised at $100k (I know this is unlikely but makes the math easier). I could then use 80% LTV of the $50k equity ($45k) to use for a down payment on a rental property.
The problem I see is, since I have to put down 20% on investment properties, that $45k would only get a few properties, if that, before it ran out.
Has anyone had any success with this strategy? What are some other strategies to acquire rental properties fast?
I am at a standstill until I figure out the route I want to go.
Thanks in advance to any replies.