Selling current rental property to buy 2 rentals

[Rich Chen]

We own a rental property that was our previous starter home. The condo was purchased around 450k and it has been paid off. The home is now valued at around 700-800k. It is currently generates $3k monthly.

We're looking into either get a HELOC or sell the condo to purchase 2 rentals in cheaper areas. Still doing research on rental areas.

I'm not really familiar with how all of this works but feel like I'm sitting on enough money to get more out of what we have, instead of building our wealth. I appreciate any guidance.

[Theresa Harris]

By less expensive area, I'm guessing you mean the cost of housing in that area is lower, not buying a house in a rougher area (the latter is not a good idea).

Start by talking to your bank to find out how much you are qualified to get for a mortgage. then start looking for homes in that price range. You could look for duplexes which have the advantage of two units under one roof. Be careful if you buy in an area with a HOA.

Also know if you've not lived in the house recently, you will have to pay capital gains on the profit.