Getting into it with capital on hand advice

[Mike Minigell]

Hello all, first post here. 

I have read a few books from here and talked to a few folks around.  I am currently an active duty Marine and will be transitioning out within the next few years. I would like to purchase my first property this year and start working on ultimately a few properties residential or commercial. 

 My situation, I currently own a house in SoCal purchased in 2022 for 1.59m. I owe nothing on the house as I had purchased it cash (before you ask, I was in a very fortunate position). Owning the house outright gives me some flexibility for my next purchase. I currently "house hack", living in one of the bedrooms, and renting out 2 of the other rooms. I have a baby on the way and eventually would like to move out of SoCal in 2025. 

If you were me in my position, where would you start this journey? I have explored options into a HELOC. The idea is purchasing a property with the line of credit, and then repairing it to renting standards in an up-and-coming area (possibly Atlanta) over 6 months. Since I am not in immediate need of cash flow, I have some flexibility there.

I appreciate your time reading this and any useful insight you may have!

Mike

[Malcomb Stapel]

@Mike Minigell You've got a lot of options with that kind of equity. In fact, a lot of investors on here would be envious of that situation. The HELOC is definitely a solid strategy. We've used ours lots of times to purchase rentals. But, to put your situation in context, using your own starting number.

At an ARV of $1,600,000

80% LTV is $1,280,000

Which equates to $6.4 million dollars worth of leveraged buying power assuming a 20% down. That's quite a few homes, possibly several smaller commercial properties. All of which you can attempt to refi out of later if your initial buy is done correctly. There's so many options for your situation. But, to answer the question you had, start by just setting up the HELOC. You'll know exactly how much you have to work with, and your locked and loaded for any deal that comes your way.