First Rental Home Investment Strategy

[Dustin Payne]

Hey All! My name is Dustin and I am a newbie to Bigger Pockets for the past couple months and I'm hooked! I'm new to real estate investing and have a goal to acquire my first property by end of this year. The initial strategy that I am drawn toward is the BRRRR method. My wife and I own a home in a great neighborhood that we currently have about $130k-$150k worth of equity in. We also have enough cash set aside for a potential BRRRR. We are planning to list our home for sale later this year as we will be moving to my wife's family farmhouse that needs rehabbed. Her parents plan to move there eventually so we will be working out a deal where we rehab the home while they put up the money for the repairs. After it is rehabbed we will live there rent free until they are ready to move in which we will then build our forever home. I recently listened to episode 301 where they interviewed 11 different people. The first guy, Tim (Something), mentions a strategy of turning your current home into your first rental property. It is kind of unconventional, but in our situation it seems interesting. My question is.... Does it make sense to do exactly that? Turn our current home into a rental property where I believe we could easily cash flow $400-$500 and then use our cash we have set aside to BRRRR a second property? OR.... Sell the house while the market is on fire and cash out that equity and use all that cash to buy a couple properties? I am drawn to the idea of turning our current home into a rental and then using our cash, or doing a cash out refi to acquire our second or possibly third property. Am I missing an angle here that would make this a poor decision? Would love to hear your thoughts and suggestions, and thank you in advance!