Hi everyone. New BP member and, Like most people nowadays, I live check to check. I purchased my first home in 2014. I took out a 401K loan to make the purchase and went with an FHA loan because I did not have the 20% down payment for a conventional loan. I am now looking to possibly get into real estate, but I've been the type of guy who takes the safe path without risk for fear or losing everything because I get in over my head or over leverage.
I have some savings for the what ifs, and I have a small landscaping business that also has a some savings that I use to operate the business, but since I am looking into getting another property to turn into a rental, I find myself without having enough money to do so. I was thinking of taking another 401K loan out which is limited to $50K which is 20% on a $250,000 home and that would leave nothing left to cover the taxes, insurance, repairs and minor touch ups to get the property tenant ready. Thats if I could even find a home for under $250K these days in MA. Im sure there are deals out there, but it would more than likely need more work than I can afford to put into it. Another option is to contact local banks and try to get a HELOC to tap more cash to make a purchase, but what are the pros and cons? What would you do in this situation???
Total new to this and willing to learn and put in the work, but I just need some guidance. I currently reside in MA on the Northshore. Thanks in advanced for the replies.