too soon to buy more investment properties?

Question

I bought my first triplex in April last year. The last 9 months have been quite interesting - had to get the property deleaded, couple of break-ins, an eviction, and bunch of other new landlord stuff - it's been a good learning experience. In terms of returns, I didn't make a single dime in these 9 months (given all things above) but didn't loose any either.

Now, I am at a point when I need to decide if I should buy another property or not. Is it too soon for someone like me, who has a full time job, does not have much experience in landlording and real-estate in general, and the only place where buying makes sense is an hour away from where I live.  If I decide to get another property, the 20% down payment will be funded by a HELOC against my primary residence, and rest 80% will be a new loan.

Looking forward to any advise I can get.

thanks. Vicky

Jesse T. · Answer

I would definitely pay off the HELOC(or at least have the cash to do so) before buying another property.

With your full-time job, the distance and your current high amount of leverage you don't want to spread yourself too thin.

Vikas Ahuja · Answer

@Jesse T. - my existing triplex was financed very similar to what I mentioned for my potentially upcoming purchase - 20% on HELOC, 80% conventional loan.

Jesse T. · Answer

I would try to save up 10% for the down payment.  If your triplex starts cash flowing that should help with saving up.

How is the triplex financed?