My Plan To Get Started

[John Oyedele]

Decided to share my plan to get started investing to get feedback from the BP community to make sure it is a sound strategy.  Appreciate the feedback in advance.

Current situation:

• Family of 3 will be family of 6 in a month (getting married...not having triplets!)
• Currently living in apartment
• Working full time as a management consultant and also in grad school
• Living below our means and currently building savings for emergency funds
• Blessed with a promotion that will allow us to build savings at a faster rate
• Estimate to have $30k in savings in 12 months time (depending on how well I control my Chipotle cravings :) )

Plan for first property acquisition

• first property will be primary residence
• Find distressed / REO property (4/2/2)
• use FHA 203k loan to roll in rehab cost and put 5% down (heard doing 5% instead of 3% means no PMI, need to verify that)

Plan for investment property acquisitions

• Assume rehab yields 25% ARV
• Use HELOC and savings to purchase first and subsequent investment properties as soon as possible.

Overall I'm looking to force equity in a primary residence and use HELOC and savings to start acquiring properties. Below you'll find a spreadsheet snapshot where put numbers to the scenario. Please note that the numbers need to be validated as it is all assumptions. I have a realtor who can give me access to the MLS, so next steps will be to run analysis on actual properties.