Long post, looking for advice

[Joshua Tidwell]

Hello everyone! My wife and I have decided to jump head first into the real estate investing pool. Our goals are aligned but we are not seeing eye to eye when it comes to the best strategy to get started. I’m hoping to get some advice on which path to take.

Like many others here our goal is to attain financial independence with real estate investing. We’d like to achieve this with a combination of rental properties for cash flow (BARRRR strat) and flipping later.

We currently own a 3 bed 2 1/2 bath in SE Portland outright. It was appraised at $349,000 last year. Two bedrooms are rented out to friends for a total of $1200 a month. We pocket a little under $900 after all the household bills are paid. Our combined household income is hovering around 110k a year with about 15k of debt.

Our debate revolves around how to finance future deals. She enjoys the security of knowing the house is paid off should anything devastating occur and I see it as a large sum of dead money.

My original plan was to take equity out of the house and start buying houses in my area. It didn’t take long for me to realize our money wouldn’t go very far in Portland’s current market, so I looked into buying c class properties in the mid-west. I figured our risk would be lower and it would be a good starting point for cash flow. Our current tenants would pay for the new loan and new tenants would provide cash flow from other properties. She’s not a fan of this plan because it involves taking equity out on the house.

We sat down today to talk about alternative strategies we could use to get the ball rolling and she suggested buying a second property in the Portland area using my VA loan benefit. Then moving into property B (duplex would be ideal) for a year and renting out our area in property A to a third roommate. The total income from property A should pay for most of the mortgage on property B. The rough numbers would look something like

Rental income from property A- $1800

Mortgage, insurance, and tax for a 350k property- $2100

Possible rental income if we house hack a duplex $800- $1300 

Cash Flow 500-1000 per month

After 1 year we will have 3 doors and a cash flow of $2800- 3800

 I’m going to cut this post off there because its already much longer than I intended. Any guidance on what route we should take or other advice will be appreciated!

Thanks,

Josh