# What do I do with the equity?

I have \$300K in equity in a home that I own outright. I was thinking about getting a home equity loan and purchase 2 more reality properties. Both homes would cost me about \$150K a piece. Here are the two scenarios that I am looking at;

Scenario #1

First home put \$100K down with a \$50K balance.

Second home put \$100K down with a \$50K balance.

Mortgage on a \$50K balance = \$260.00 x 2 new rentals = \$520.00 in mortgage payments.

I currently receive \$1500 per month for the rental I already own.

First new rental can bring in another \$1500 per month.

Second new rental can bring in another \$1500 per month.

\$4500.00 in total payments going in minus \$520.00 going out for the new mortgage payment = \$3980 in my pocket.

Yearly this is \$47,760.00 in payments coming in. Both new rentals can be paid off in a little over 2 years.

Scenario #2

First home put \$150K down and its paid off.

Second home put \$100k down and I now owe \$50K.

Mortgage on a \$50K balance = \$260.00 per month.

I currently receive \$1500 per month for the rental I already own.

First new rental that I NOW own I can get \$1500 per month.

Second new rental can bring in another \$1500 per month, I don't own it yet.

\$4500.00 in total payments going in minus \$260.00 going out in new mortgage payments = \$4,240 in my pocket.

Yearly this is \$50,880.00 in payments coming in. New rental can be paid off in a little over 1 year.

Do you have two properties identified that fit these numbers? It looks like you're not budgeting for vacancy, repairs and various transactional costs, I don't see those line items in the math.