Little to no money and want to invest in City of brotherly love

[Wesley Mitchell]

West Philadelphia born and raised, on the play.. you know how it goes. This is my first post on bigger pockets and I’m Extremely excited about real estate investment in my city. 

What I want to know am I jumping the gun on getting into it? I’m newly wedded with no children. Our house hold income is only 90k with my wife making more than me. I personally already own a property fully owned with no loans out i inherited that’s worth 80k credit score is right around that 640 mark. I personally don’t have any debit other than 9,000 left on my student loans. 

My current plan is to take out a HELOC (home equity line of credit) out on the house I ownfor 64k (80%) to use as readily available cash to finance deals. Start a LLC to keep my personal and business separate. Then look for properties. I want to use Hard Money loans for my first flip. With the HELOC available if after the renovation and all I can't sell and need to pay loan.

Questions I have:

Is my plan solid are there gaping holes im missing?

Is finding, buying, rehabbing, listing, holding and selling a property with 60k possible? I’m using calculators from bigger pockets and from FortuneBuilder seems doable but I always see bigger numbers used. 

Does my use of my house make sense? Could I use it in another way to help me? 

And please if anyone has information on the Philadelphia market I’m all ears and would appreciate any and all tips

[Account Closed]

Your numbers are almost identical to mine, and I've been slowly building up a portfolio of rental homes that I self-manage. I mostly use the BRRRR method, using my 90k home's HELOC as funding until I cash-out refi.

Right now the market is so crazy that its difficult to find deals, and a deal I want only comes along every couple months at best.  You would probably make more money quicker in this market by flipping, but my target is to build cash flow and also (hopefully) nice appreciation for when I go to sell. 

The biggest difference -- I'm in Ohio, where values are (I think) much lower and my personal income goes a bit further. My average acquisition price is about 30-40 and rehab is usually 5-20k. Note that I'm very handy and do almost everything myself, so my rehab number is artificially low.  There is a bigger pockets book about estimating rehab costs and I highly recommend it. 

Also, no real sense in having the LLC unless the lender needs it. Much smarter people than I say it doesn't really offer as much protection as you'd think, and that umbrella insurance is a better route. It can also complicate matters and cost you transfer fees if you have to switch title back into your name in order to get conventional financing.

The biggest tip I have is the phrase "you make your money in RE when you buy" and "there will always be another deal"..   If I tell a local non-investor what I paid for a property and they get vaguely mad/suspicious, I know I did well..