Closing on my 1st SFR next week and ready to pursue more deals

[Jimmy Epolito]

Hello BP community! I recently purchased my first sfr through roofstock and the process has been very smooth running so far. I close next Thursday on a cash flowing property.  My goal on the first property is to buy and hold with little to no rehab so I could get my feet wet.  Now that my feet are wet I am getting the itch to dive in a little deeper.  I would like to share my situation and ask for recommended next steps.

I am 45 and the father of 4 with the oldest only bing 5.5yrs old! I know, I'm a late starter but they keep me young!  I have a solid job with good income over $100k but my wife is a SAHM and funding a household with 4 little ones is very costly.  I will have enough money to put down on a similar property by April and should have enough to buy a 3rd shortly thereafter.  I have excellent credit as well with no debt other than my primary residence.

I am thinking that since capital is not super easy for me to build up due to the size of my family I am looking for creative ways to scale up. I owe $370 on my primary residence which should appraise for $480-500k. I have a 1st mortgage at $325 and a HELOC maxed out at $48k. (used the HELOC to build a pool). I am thinking that rather than wait until April that I apply for a new HELOC to replace my existing HELOC and attempt the BRRRR method. If my house appraises at $480k and I get a 90% HELOC that would yield $62k net after paying off original HELOC. THis could be used for 3 down payments on 3 $80k SFH which do not need rehab or I could use it for a DP on a BRRRR and the remainder for the REHAB. Which scenario would you choose or does it make more sense for me to wait until I have money in April to get one more unit?

I have also seen online a lender called "LendingOne" They give a fix to rent loan then convert it to a 30year afterwards. Starts with a high rate interest only loan with 12mo interest only payment. Up to 90% of purchase and rehab costs, 70% ARV. Has anyone driven down this road?

I am eager to build a portfolio and I am intrigued by the many different ways to do so. 

Thanks in advance!

James

PS. I live in Clermont FL just outside Orlando but am open to other markets.  My first purchase is in GA.  

[Jimmy Epolito]

Thanks John! Sounds like you did exactly what I am envisioning my path to be. I am leaning heavy towards getting a bigger HELOC so I can use that for down payments which would allow me to always have cash set a aside for things beyond normal maintenance. The one I am closing on next week was just under $70k and should cash flow just under $200mo after all is said and done. I think that is pretty good for a first purchase.

Congrats to you as well for being 5 years in with a solid plan!