Introduction and Question

[Carleton T.]

I am not sure where to start.  I am ready to be out of the Rat Race.  I grew up with a mom who was a teacher and my dad was a mechanic.  They didn't teach me about money.  I was just told, by them, and by my education, that if I want to be successful I should work hard and be a good employee, and then everything will work out.  But that is not what has happened.  I have spent my life trading my time for my money.  I have worked as a residential remodeler for 25 years, ever since college.  One positive thing is my knowledge and experience I have in construction will help me rehab properties to turn them into high quality rentals.  And I will be good at managing my properties, at least until I get too many to handle on my own.  

But I need help figuring out how to go about starting.  I have been reading a ton, but I am having trouble applying what I am learning to my situation.  So here is where I am at and then any help you all could give me would be greatly appreciated by me, and my daughters.  I have one daughter who is a senior in high school and I want to be able to help her go to college. ( Despite my increasing lack of confidence that a college education is what would be best for her future.) 

My family and I have a mortgage on a house in Orlando, FL. I was considering doing a HELOC on my house to start buying rentals using the BRRRR method. Although, I have read a bunch of posts on here that it might be best to do a cash out refinance. I could get more of my equity, if I understand correctly, 100% instead of 75%, but the interest starts immediately, on all 100% instead of just the amount I take out. On the other hand, banks could call the loan anytime they feel like it if I get a HELOC. But how likely is that? And is it true that interest rates are much better with cash out refinance? The research I have done didn't mention them having different interest rates.

Actually, the main issue I am facing is I am self-employed.  I will be self-employed for 2 years in May of 2022.  So I have at least two strikes against me from a lenders perspective.  Not only do I have steady, but fluctuating income, lenders only care about what I make after I deduct all my expenses.  I get it. My income is all up to me.  I have to work hard everyday, not only to produce high quality work with my hands and my tools, I have to always be thinking about how to fill up my schedule, because if I don't work, I don't get paid.  But I feel like I live in a catch-22.  I want to get a refinance loan of some sort to help me buy rental properties to get out of the rat race, but lenders would rather see me get further into the rat race by taking a W-2 position at a construction company, but I would get paid much less than what I make as an owner of my own business.  

The other issue I think about a ton is what should the first thing I do with the equity I get access to. My wife has one idea and I have another. She wants us to build a detached apartment in our backyard and rent it out as an Airbnb. It would do well too because we live in a desirable area of Orlando. But I would rather, at least for the first thing we do, buy a rental house has my first house using the BRRRR method. I am worried that if I use the money for improving my own property then I won't have any equity left to start buying properties with the BRRRR method. At least not for another few years, after our homes equity has improved again. But I really don't want to have to wait years before I start really getting into investing. I feel hungry right now. I would love to get like at least 2 properties per year for the next 4 or 5 years and then get into multifamily buildings with 10 to 15 units. And I think I am going to go crazy if I have to wait years to start. I already have to wait till May of 2022 before lenders will consider helping me with my refinance.

Any thoughts you all have I am very thankful for.