All Forum Posts by: Aaron McDonald

I am on the tail end of a BRRR on a triplex, and I'm exploring options on the refinance side. A cash out refi is an option, but I also like the idea of doing a HELOC on the property. Through my research, it looks like HELOCs on investment properties can be challenging.

I found 1 credit union (Redwood Credit Union) that looks like they will do HELOCs for investment properties, but I'd love to hear from the community if you've had a good experience with a bank or credit union doing a HELOC on one of your investment properties.

Thanks in advance!

@Lonnie Coleman

I definitely see what you are saying about the pitfalls of out of state investing.

@Tom S. 

Great to hear that you have been able to do this successfully! Agreed that the numbers that you posted are out of the question out our way. How have you managed the rentals from across the country? Do you have a property manager?

@Kevin Harrison

 Great advice - that's the kind of feedback that I need to be aware of and keep in mind.

Thank you both for your feedback! Here are the factors that made me think about going the rental route for our primary residence:

- Even fixer uppers in decent neighborhoods in my city go for $500k+ right now (we are tied here with school and family, so can't move to a different city)

- If we were to use the $25k as a downpayment on a $500k house for us to live in, our mortgage payment each month would go up about $1600 (but we would have the $300 income from our condo rental to offset some)

- If we were to rent a comparable house to what we could buy, we would only be paying about $800 more per month for housing costs and that would be offset by the $300 income from the condo rental AND the possible cashflow from the rental that we would buy with the $25k

So I looked at that and thought that the lower monthly housing expense increase for renting as our primary residence combined with renters paying down 2 mortgages for me instead of 1 made it a more attractive option. Does that make sense?

I've been interested in real estate investing through rental properties for quite some time, but I'm finally to the point where I want to stop thinking about it and actually DO IT. That said, I could use some expert advice to help me know if my idea for getting started is crazy.

I own a condo that me and my family live in. We have enough equity in it to pull out $25k to buy a rental property. The condo itself would also make a great rental (should rent for $300-$400 more than my mortgage & HOA payments based on comps).

My idea is this:

- Do a cash out refinance or HELOC on the condo to pull out $25k

- Use the $25k as a downpayment on a rental property in another state that is more affordable (there is nothing for sale anywhere near me for less than $250k)

- Rent out our condo

- Move into a single family home that we rent from someone else

My thought is that would give us 2 rental properties and a house with a yard to live in (which we also want for the kids).

What do you think - would I be biting off more than I can chew? Please poke as many holes in my idea as you can - I'm here to learn from you all.