Accidental Flip & plotting the Next Step

[Ryan Boyce]

Hello all, I am Ryan and I am new to REI, but have been a sponge to bigger pockets for about a month now. I have been soaking every podcast, key word alert, and forum up. I have a genuine passion for real estate and I am currently stuck on what my next move should be. I would love some advice from the great forum of BP.

Background :( accidental first flip)

My Wife and I purchased our primary residence (SFH 3bd, 2 bth) Feb 2012. It was a short sale that was listed for 200,000. We were able to get them down to 160,000 and financed it with a FHA 203k loan. After the purchase price plus the 15,000 in repairs (that were built into the loan) we had at total mortgage of 175,000. After the appraisal in March 2012 the house appraised at 225,000.

Financial Situation:

I have a good paying job that is very stable and I am currently studying for receive my real estate license for side work plus I see advantages for my investment future plus getting my feet wet in real estate .My with is a waitress with a fluxuating income. We have about 10,000 in debt/school loans between the both of us. My credit is in the bottom fair range (damn college) with hers in the upper fair range. We do not have big cash reserves but are stable (damn kids).

Problem: I know right now we could sell our house for 230,000-240,000 based on the comps in the area and the high demand for the neighborhood. I am stuck because I would like to start my investing career but the only cash reserve I have is my equity. So the situations that I have been debating on are

1) Sell the house pay off the debt with a portion of the sales, take a small amount for a down payment on another SFH for and do the same thing we did before. Then take what's left (est. 20k) and start my investing career in flips, buy and hold or wholesale in that order. Or

2) Stay in the house we are in and either get an equity loan or line of credit pay the debt and have more of a reserve to invest with.

So Long story long

1) What would be the best investment strategy given the current situation?