Planning to Get Started

[Aften Hennricks]

Howdy! I'm new to Bigger Pockets and looking from some perspective on our initial planning from more seasoned investors.

My spouse and I are at the beginning stages of getting into real estate investing and property management. Currently, we're in the process of selling inherited land which we live on to (a) pay off outstanding debts and (b) purchase a multi-family home to live-in and rent out. Our plan was to put up a sizable down payment to open up the option for a HELOC. From there, we were hoping to begin doing some flipping (to increase the cash we have available) and BRRRR'ing once we have the funds to do so.

We live in the Portland, OR metro area and have family in the outskirts of Eugene and Roseburg, so we're thinking about all of those areas for flips/BRRRRs. Roseburg family has some experience in flipping and renting, as well as contracting/handyman work. Our goal is to spend the year learning and saving, the second year working on a couple of properties, then taking off from there.

Perspectives? Does it sound like we're on a reasonable track here? Any thoughts or advice is appreciated.

[Drew Sygit]

Don't understand why you would put more down, only to pull it back out on a HELOC?

Mortgage rates are at 50+ year lows, so from a purely financial view, locking up the most amount of money at the cheapest guaranteed rate would be something to consider. HELOC's are just a credit card secured by your property. Their rates change with the economy and will probably start heading up in the near future.

Put the least amount down to avoid PMI/MIP (usually 20%) and keep the cash for your flips. You can still investigate a HELOC to tap into your 20% down payment - but be careful about over-leveraging!