Posted about 1 month ago

0 to 8 units in 1 year

After reading the classic real estate & personal finance motivational books, I had committed to a self education with BP on real estate.  Last summer I found a fixer upper duplex that was need of a minor gut rehab (electrical, plumbing, roof, HVAC was all good - everything else needed replacing)

After rehabbing the duplex myself over 4 months, I have been successfully house hacking since December.  The $20k rehab was all put on a 0% APR for 18 months credit card.  I felt comfortable with this credit card debt having the cash on hand to pay off fully if needed and with my eliminated housing expense through house hacking.

My savings rate while renting was 38%, which I was happy with at the time.  However it was relatively slow to build up enough savings to purchase my first property and have enough for a rehab budget.

After house hacking with a roommate on my side, my savings rate has increased to 85%. This change has exponentially increased my ability to save for future investments.  The "sacrifice" of renovating my duplex myself and not living in a brand new house is well worth the financial runway I'm now able to develop. 

I was able to grow a saving amount that would qualify for 25% down on a typical SFH, duplex, triplex, or maybe quadplex in my area.  I found a deal on a 6 unit property in my area that I had just enough savings to purchase through normal commercial financing.

BiggerPockets has given me the education, motivation, and confidence to pull the trigger on this 6 unit property.  Self-reflecting on my life over the past year is pretty wild.  Trust the systems, your education, work smart & hard - you can make it happen.  Best of luck.

I'm now obtaining a HELOC on my duplex which will qualify for a down payment on a 3rd deal.  Using a HELOC will increase my monthly costs with the interest payment (and needing to repay the principal later on).  I currently like living for free and don't want to pay the interest or the principal on my HELOC.  Purchasing a 3rd deal will need to pay for the HELOC and have enough ARV in pay back the HELOC.  Trying to balance becoming overleveraged and handcuffed to my job for paying back the principal (could also traditional refi my duplex).  Having the HELOC available will hopefully make me prepared for a future opportunity.  Not having the HELOC and not be prepared won't make me "lucky". 

Anyone have experience with a HELOC on their house hack to purchase a new deal?  What was your next deal's strategy?  I'm a buy & hold investor and am unsure if I want to flip houses to build capital or repay the loans principal.