Too much, too soon? Looking for feedback.

[Erica Pelfrey]

Hi Everyone,

First time poster, few months listener :-)

Looking for feedback on what our next move should be.

My husband and I took out an HELOC last June and jumped into real estate investing. We bought our first duplex using money out of the HELOC and it is cash flowing 200/door. We then were able to buy a triplex in October on land contract but again used the HELOC for the down payment. The triplex is cash flowing almost $700/month in total.

I have gotten really hungry and want to keep forging full speed ahead. We are looking at another triplex tonight.

However we only have enough left in the HELOC to probably do one more down payment on a triplex, so I have also started researching auctions and foreclosures in my area thinking maybe we could get two more quickly that way.

I have never been someone who likes to take on debt. My husband and I have rapidly been working to pay off our personal debt but still have a ways to go, also why we do not have a lot of cash for down payments, as all extra is going on debt. However I have been looking at real estate in a new mind set. We havent technically spent a dime, as all of the expenses are being paid by the renters plus cah flowing well. To me now, its all about scale.

My question to you all is, are we being irresponsible by trying to get too much too fast which will max out our HELOC? Or should we continue, with another multi family or a couple of foreclosures to really try and pay down the HELOC fast? We have been able to build up our nest egg in our real estate business so far which would cover some major maintenance issues if they arise but again it makes me nervous that we may be too close to maxed out. I should also say we have zero intentions of moving out of our current home ever, so the risk on having to pay the HELOC immediately is low.

Thanks for reading and I am very interested in some experienced feedback.

[Nick Rutkowski]

@Erica Pelfrey

Godspeed, if you can scale then go for it. However, make sure you have reserves in place for your other buildings first. As stated already. Second, foreclosures take a long time to buy, if you’re looking for speed then you will be held up by the process. Also, make sure the foreclosed properties are inspected. You don’t want an unforeseen issue to hold you up. As I learned this the hard way. Good luck!