Beginners with one current rental. **Seeking Mentorship!**

[Robert Walega]

Hello. My name is Robbie, and I am new to the forums.  I have been a listener of the BP Podcasts and watching their YouTube content now for years. I even bought a few books on Audible and have listened to them a few times now, so it is very exciting to take the leap to be a part of the community!

A few years ago, my wife moved in with me before we were married and instead of selling off her house we decided to do a bit of updating and rent it out, we invested about 10k in the property before putting it on the market. We have amazing tenants at the moment who are a military family and they just renewed their lease for another 18 months.

Our current situation is a bit small, but would be PERFECT as a short term rental, due to the fact that it is tucked in the woods, but down the street from an all sports lake with lake access. The woods in the yard are home to city mountain biking trails, and the public beach and park is walkable through a short trail through the woods as well. We are looking to possibly move but not sure if we can borrow against the properties to move into a new home so we can take advantage of renting out our current residence?

We are looking to also grow our portfolio as soon as we can and eventually dive into multi-family units. As much as I have been following, the thought of all of this terrifies me to go in blind. Both my wife and I have above 800 credit scores and are just looking for some guidance to the steps of what to do next. We know the wrong steps can tarnish what we have already worked hard to build.

I know these forums are filled with knowledgable professionals and we would sincerely appreciate some help in the right direction. Thank you in advance for taking the time to read this, as well as possibly reaching out for guidance!

Cheers!

Robbie

[Robert Walega]

Quote from @Jaycee Greene:

Quote from @Robert Walega:

Thank you Ken! I read it over and it's something I may dive deeper into.

Hi Jaycee! Thank you for the welcome! It's a bit intimidating around here as a newbie to be honest. We have discussed looking to a 2-4 MF property next, as we would like to increase our monthly cash flow and continue the upward trend. We haven't nailed down a price range for a down payment yet, we just got married in July and trying to let the dust settle to see where we can really dig our heels in. Our local market is the ideal space, as I am pretty handy and knowledgeable in the home renovation space, so I don't mind taking on a "fixer upper" if it serves the purpose better in the long run. We are really just curious if we can leverage the equity from our 1st rental to help purchase a second, and the process on which we could do that the most efficiently. We have always heard that your first is your hardest, but we aren't sure how much truth is in that, as people will tell you anything on the internet or in the media without anything to back it up.

Hey @Robert Walega! For most of my developer clients, their hardest deal is always the NEXT deal as they have a tendency to do bigger and more complex deals as they go through their REI journey.

There's a very good chance you can leverage the equity in your rental to buy another rental. What's the current value of your rental, the amount of debt you have on it, and the monthly rent you charge?

I looked some fourplexes near you - would this one be something of interest to you: 30812 Fink Ave, Farmington, MI 48336? Assuming there's no significant rehab needed for this, I'd estimate a buyer would need about $90k in equity (+ closing costs) for the deal.

Hope this helps.

Wow, thank you so much for checking up on that for me!! Much appreciated! I pulled it up on Zillow and that particular property is now pending. That looked nice as it seemed to be turnkey with long term tenants already occupying the property. Does this happen when people are trying to upgrade? Like I had mentioned in my original post, I am pretty handy when it comes to renovation/repairs and I am never afraid to get my hands dirty but I never have luck finding any decent deals using the typical Zillow, Redfin, Trulia apps. My wife is considering getting her  real estate so we can have more flexibility, but that is still just talk as of right now. 

We have about $65k in equity from the first rental. We owe about $140k on it, it's worth about $210k, but maybe slightly more since I did a lot of upgrades to it prior to renting it out but we didn't get it reassessed. Would a smart move to be using JUST equity from the rental to find another one? Or should we consider using additional equity from our current home. It does seem risker using your own home though. We owe about $95k on our current property and it's worth about $305k.