How should i invest 70k?..

Question

Hello, I own a rental property and I have paid it off in full free and clear. It is worth approx. 100k, I have been basically pre approved to cash out on the equity and receive 70k loan with monthly payments of $700. How should I re invest that money? I am tryin to purchase more and more rentals to achieve freedom number. I am in Corpus Christi Texas. Thank you!

Logan Gonzalez · Answer

Thank you for the feedback so far, I actually think I figured out the general formula and equations using a mortgage calculator. Thanks again.

Marina Draper · Answer

Hi Logan,

Just out of curiosity - what did you decide to do after your calculations?

Levi Rudder · Answer

I personally would split the cash and buy 2,3 or 4 units with it putting about 20% down on each. That's if you want to only be in your backyard. I converted my funds into notes because I didn't want to keep dealing with late night calls about what the tenant broke.

An Duong · Answer

Look for discounted rental acquisitions!

Rodney Sums · Answer

As for whether or not it's better to take 70k and split toward two properties...depends on the math and the properties you're comparing.  Two cheaper properties from the 70k may perform better than a larger one using all the 70k...or vice versa.  i.e. two properties that cash flow 100/mo each vs one property cash flowing 300/mo.

I'm not nearly the same expert as others who can answer your question but I understand what you're getting at.  That is: what's the most efficient way to invest you equity?

You said you want a chain of rentals.  What kind? Single family? Multi family? commercial? lease options? Mix?

Logan Gonzalez · Answer

More specifically I am trying to chain purchase rentals by extracting the equity from the previous one. I am sure there is a better choice of all the options. Do you take a small equity loan for 20% down payment on the next rental? Is it more efficient to put all my 70k down? Do the numbers typically favor the investor if they were to split the 70k into two down payments and buy two properties? I recently bought a nicer second home that I currently live in. That particular mortgage is making my debt to income ratio look bad. Is there a work around to this issue? What exactly would some of the people in this community with that amount of equity and those type of payments to the equity loan?

James Masotti · Answer

I'm sort of confused by the question, because you already answered it yourself.  Buy more rental properties. Or am I missing something in your question?