How to start building a portfolio

[Michael Vann]

Good morning. I'm trying to start real estate investment off right and I wanted to get some advice from you all. I'm 43 years old and living in NE Florida. I currently have a regular 9-5 in the IT field. I have been studying property investment online and watching a ton of videos for (embarrassed to say) approx 2 years now and have never pulled the trigger. I'd say that's "analysis paralysis" for sure! Here's my situation, I own two properties, one property is a post war bungalow in avg condition (needs a little work) which I own outright. This property appraises for around $92,000.00. My two "adult" children currently live there but they will be exiting the property in January. The second property is a river front condo in very good condition which appraises for around $171,000.00 in which I owe approx. $155,000.00. I currently reside in this property. I have no other bills other than my condo. Everything else was just paid off including all outstanding loans, credit cards and car note. I am interested in understanding how best to leverage the equity in my first house to obtain capitol to purchase rental properties. My ultimate goal is to build a strong portfolio that will produce enough positive cash flow to supplement my current income in the short term and eventually enable me to quit my 9-5 and focus on investment full time. I have heard about the BRRRR method for a few years. What are your thoughts on this method and what should my first steps be to implement. Also, if there are any other schools of thought as to how I should go about investing other than BRRRR, please let me know. Thanks!

[Michael Mullininx]

@Michael Vann going with 20% down and carrying the mortgage keeps money in the bank you wouldn't have otherwise.

For example, say you're looking at a $100k property. If you purchase outright with cash you've got $100k tied up in this house for 6 months until you pull out $80k that you can reuse plus rent. 

If you leverage 80% then you still have $80k on hand to invest elsewhere if the opportunity presents and rent should be enough to cover monthly expenses plus a few bucks extra.

Personally I would leverage up front. The $1k/mo profit from rent checks if you buy with cash would be nice but I would prefer to have the $80k in the bank with the tenant paying the mortgage on the house. Ideally you would hold the property for 10-20+ years and sell for well over $100k (depends on your area) once the mortgage is payed off.