How will I buy my own house if I invest cash in properties?
I live in the bay area and we all know about its housing market. So instead of sinking all my cash to buy a home in silicon valley, I'd rather invest in properties in other places for some cash flow. But if the market cools down, then I'll maybe buy a house in the bay area. So here's my dilemma. After investing in a few properties, even with cash flow, it'll take some time to replenish my cash reserve. What if the market cools down and I don't have enough cash? I think I can take HELOCs out on the properties I have for a down payment, but wouldn't that still affect my ability to borrow for the rest? And even if I am able to borrow, the rate of HELOC is much higher than a traditional mortgage, I would want to refinance to a traditional loan. But again, unless I have actual equity in the house, it would be hard to refinance, correct?
To sum up. my question is, how would I be able to borrow and buy a house in the bay area (presumably much costlier) if I don't have enough cash reserve but have equities in investment properties?
And please.. let's not get into the topics of if bay area housing will ever cool down or if I should buy a house in bay area at all. I'm not predicting anything or dead set on anything. I would just like to know what you would suggest if things do happen this way.
Thank you!