I just got back from talking with the bank about my situation. I was told in my situation that I should be looking at properties with 5 or more units. My goal is to simplify everything and to have one person I can go to with all of my needs. I went in with the question can I consolidate all of my accounts and use that as collateral towards the purchase of a property. I have roughly 100k sitting in different spots, Edward Jones, and work 401k's, and some other equity. He steered me towards a HELOC and I could get 60k towards a down payment that way. Not sure what my question to the group is, but I want to be able to rinse and repeat this process at least every 6 months. Would this be doable? I've been told lots of stuff, and have read lots of stuff. He says, 5 or more units is going to be easier for me to get financed than 4 or less. I'm probably making this more complicated than I need.
@Phil Harris It might help to determine what your goals are. Are you looking to build long-term wealth, maximize income? Why do you want a 5+ unit property? Are you looking to become a property manager? How much risk are you comfortable with?
If you're simply looking to maximize your wealth-building let me give you a simple formula. Prepare your personal financial statement. It's essentially the same thing as a business calls a balance sheet. What are your assets? What are your liabilities? The difference is your Equity or Net Worth.
If you want to maximize wealth-building you need to get the maximum return on your equity. However a key thing to pay attention to is how much risk are you taking for that return?
You can take massive risk and bet on the lottery or in a casino. If you win, your return will be very high but your risk was also very high. In all likely-hood you will lose
You can also take minimal risk and get very small returns like a CD paying 2%.
The key is to find the sweet spot in the middle of those two with enough diversification to protect you from one bad decision.
But back to your original question. Real Estate is a great answer in the middle of the two investment extremes. In my opinion it is fairly low risk but high return. So I would take a bit of that Home equity loa and try a REI property.
Jeff, thank you for the response. My goal is long term income. My main issue was not losing my positions in my other accounts, thus the need for a personal loan or a collateral loan of some kind. I am only looking at 5 units or more now because he said that would be easier for him to finance. I was at Wells Fargo. My strategy is to take the income and equity I have now and turn it into something else. I don't want to wait 20 more years to "retire". I feel I have most of the money currently to turn it into cashflow now so I can slow down a bit. Maybe I'm wrong? I don't feel like I am far off though. I've been in trucking for 20 years and its killing me.
I believe that what you are experiencing from your bank maybe not the normal. Some banks allocate how much they can loan for different amounts of money. Maybe they need to fit you in to get it done.