Hey everyone. I feel like I'm at a fork in the road and would like some advice which way to go. I currently have one rental (paid off) and about 20k in the real estate fund. I am looking to get another rental soon but not sure the best way to go about it. Can/should I put a mortgage on the first property and do a BRRRR or just save till I can buy another cash? Is there another way to go about it? Advice is appreciated :)
What are your investment goals? How many rentals do you want and in what time frame? Are you trying to avoid banks and own properties out right? Are you looking for all equity positions right off the bat? or cash flow? appreciation (forced or over time)?
Eventually, I would like 20 but I haven't set a time frame yet. Probably the sooner the better. I'm not opposed to banks in the process but eventually owning them with no debt would be ideal. I guess I'm looking for whatever the best / fastest way to get the second and then the third. I am leaning toward cash flow to get the gears turning. I guess if I could find a turn key, that wouldn't be bad either.
Leverage can be your friend when acquiring real estate. If you are looking to acquire properties faster, leveraging current properties and bank financing could be a good way to acquire more in a shorter time, rather than saving to buy outright. For me personally, it is always better to get into a deal (assuming all the numbers meet my criteria) rather than waiting. What were the circumstances around the acquisition of your first rental? Was it a primary residence turned rental? How did you finance it? What made you want to purchase that specific one? The community may be able to better help you if we understand a little more in depth about your current rental and other details of your situation.
Other ways to finance properties is to use sellers who are willing to finance the property, or find private money lenders.
@Mike York with $20K you should be able to put 20-25% down any buy a rental conventionally. At that entry price your looking at $200-$400/month cash flow.
I inherited the home and it was already paid off. It was also in market condition, just painted and put in new carpet. In my area, there are some diverse markets. Generally speaking, I can get one or 2 homes for $35k and rent for $800 a month (C grade neighborhood) or I could get a rehab for around 60k and with $10-15k, make it worth 100k (B grade neighborhood).
True but that would end up taking all my available funds and I want to keep some in there for maintenance on the current rental.
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