Two Deals Done, X to go - Recommended Next Steps?

[Robert Johnson]

Hey all! To summarize - I have two deals done and have limited liquid capital to do the next, but I do have some equity tied up in a 3.5% interest loan. What are your recommendations?

We have one rental in North Carolina that was a primary residence until we moved in August. We just closed on our next primary residence just outside of Tuscon that will turn into a rental when we move again in a year or so. We are very motivated to get another deal, but since it can't be another primary residence yet, we need to get creative with the financing.

We have about $30k liquid available that grows by about $5k/mo (after expenses) from our W2s and our rental, and we could pull about $50k (pre-closing costs) out of our NC house assuming 75% LTV. I would like to make the next property a BRRRR to avoid the lack-of-capital woes again, but $30k is not quite enough to be comfortable building the "Core 4" just for them to find out we lack the capital to follow-through. I also don't think the $50k we could pull out of our NC house is worth the closing costs and replacing the 3.5% interest with today's rates. We have another ~$60k in retirement accounts that we would prefer to not pay a penalty on.

Waiting for our capital to grow is one option, but I'd like to get at least one more property under my belt before rates start going down and retail buyers start to enter the market again, which I think will drive prices up further over the next 2-4 years or so due to the severely low supply. I'd also like to figure out how to do this with our own resources before seeking private money; I think we need another 1 or 2 properties to prove the concept to our friends/family before they invest their life savings with us!

What are your thoughts? Do you guys think $30k is anywhere near enough to start direct-to-seller marketing for a seller-financed deal? Do I just need to find private/hard money? Do I just need to save up and wait a year to get another primary-residence loan?

[Carrie Matuga]

@Robert Johnson I think I'd probably wait a bit to build up more reserve if it were me. However, if you are able to get creative with a deal that included seller financing and/or sub-to with a pre-June 2022 level mortgage, it may be worthwhile to jump-in full force. It would certainly make the numbers friendlier.