Using a Refi to Get My Second Rental Property

[Jake Burkons]

Hey BP Community,

I recently finished renovating my property and am now looking to leverage a loan against it to fund another buy-and-hold investment. At the moment, I’m focusing on areas like Slavic Village or the west side of Cleveland, aiming for a single-family house under $100,000.

Has anyone here done something similar? Is there any other neighborhoods I should look into that might better fit my needs? I’d love to hear your thoughts and any advice you might have!

Thanks in advance!

[Joe Villeneuve]

Quote from @Jake Burkons:

Quote from @Joe Villeneuve:

How will this change the cash flow on the first property?

Based on my research and analysis, even using conservative estimates, I believe the cash flow could be impacted by the planned purchase. If I’m able to secure a property in the $60,000 to $65,000 range, coupled with an additional $10,000 in renovation costs, I believe this will positively affect my cash flow.

Of course it will.  That's not what I asked.  Your answer needs to be in exact numbers, with $$$ in front, not in percentages. 
1 - What's the exact CF on the first property now?
2 - What will be the new exact CF on the first property when you add (subtract) the loan from the added loan on the first property?
3 - How are you buying the 2nd property? 
   a) Will the cash coming from the added loan on the 1st property cover the cost of the 2nd property? 
   b) How much added cash will you need for the 2nd property?
   c) Will you need a loan, in addition to the cash used, for the 2nd property?
   d) Considering a) - c) above, what will the CF be on the new property
   e) How long will it take for the cumulative CF on the 2nd property, recover all the cash you put into that 2nd property?

Real numbers with dollar signs in front, not percentages, and not estimates.  If you can't answer ALL of the questions above, you didn't do a complete analysis of this investment, and thus you haven't fully analyzed this investment.