Starting strategy

[Scott McGhee]

Hi everyone,

I've spent the last couple of months educating myself about REI and my goals, strengths, weakness, assets, and liabilities. I believe I've come up with a strategy to get started in investing and was looking to see if anyone can see better alternatives or things I'm missing.

Since I'm from the Indianapolis area and have my primary residence, I'm looking to start with SFR or maybe a duplex. I'm looking for B class neighborhoods or better within 2 hours drive of me. I don't have much in savings but do have excellent credit and 40k in equity from my primary residence. I work M - F 9 - 5 and won't be giving that up anytime soon (or at least until I can replace it with REI). I'm also not a people person so if purchasing rental property I would be looking for it to be managed by a PM.

With all that said, I'm thinking going the route of a turn-key rental and use some of the equity from my primary residence for the down payment (although that could be hazardous to my home) or muddle my way through the whole process, use hard money, and then refi within a year.  Obviously the second strategy requires the property to be appraised at a higher value than what I bought it for which typically happens through rehab.

Thoughts?  Anyone use either of these methods to get their feet wet?  See a better method given the situation?

Thanks in advance.

[Shawn Holsapple]

@Scott McGhee - no need to look within 2 hours from Indy - maybe 2 minutes!

Indy is one of the best markets on the planet and we are very fortunate to live here during this time.

As Mike mentioned, please stay away from duplexes - I've tried [several times] and they are just no fun at all [even though they look sooo sexy on paper].

There a several local banks and credit unions that will refi without waiting 1 years.  Usually under 90 days is fine.  They only lend to residence of the State [sorry out of State investors].

I have been using the BRRRR for over 4 years now and love it. After refi, you should have near nothing out of pocket and still enjoy a few hundred dollars per month in positive cash flow.

If you have $40k available now - that's almost enough to buy and rehab a simple SFH in a decent area. You can always fund the rehab materials with a Home Depot or Lowes in-store credit card and put the rest on a 0% balance transfer credit card. Then repeat!

Once you do 2-3 of these you will be a pro and will be saving several thousand per door doing it yourself without spending too much time overseeing the project.

I hope that helps.

- it's always good to see another Hoosier utilizing this great site!

Of course, you need to read The Ultimate Beginners Guide to REI here on BP

If you haven’t already, please read/listen to these books ASAP!

Flip2freedom episode 77http://www.flip2freedom.com/a-3-step-formula-to-a-... - LISTEN TO THIS TODAY!

Rich Dad Poor Dad

Rich Dads Cash Flow Quadrant

Rich Dads Increase your financial IQ

The Real Book of Real Estate

The ABC’s of RE Investing

The ABC’s of PM

Rich Dad RE Tax Advantages

The 10X Rule

The E-Myth

The 4 Hour Work Week

BiggerPocketsPodCast -I hear #136 is exceptional!

Wholesaling101 You Tube Channel

Kent Clothier – You Tube Memphs Invest channel