AM I READY? or do I need to pay off some debt first?

[Christopher Derr]

My wife and I built our home a little over 2 years ago, appraised at 265k during construction for loan purposes, assessed this year at 284k. (I think it would appraise for 280K no problem now based off comps in the area that have sold or are listed this year) I currently owe 189k. and 28yrs left on a 30yr note. We also own a SFH rental our previous home that was appraised at 46k when we bought it that we owe 24k on 7yrs left and 4k on a home equity loan we used to fix it up when we lived there it only cash flows about $25/mo (it was on the market for over 2 yrs in a town of 400 ppl) So we have about 113k in equity in our 2 homes together. Other than the 2 homes we owe on still, we bought a brand new vehicle that we owe 39k on (0% apr) and I own 9k on a credit card. I do have about 30K in mutual funds and 70k in retirement 401K and Roth IRA's, however I do not want to pull out those funds.

We want to get into Buy-and-Hold Single Family Homes all with in 1 hr driving distance. We recently found a HUD home listed for 30k (I plan to offer 28.5k 5% off asking) that I estimate needs 4k in updates unless plumbing or HVAC is bad (No electric or water) so be super conservative (10k). 38.5k total. Rent in the area is 750-850 depending solely on how nice I fix it up. So it hovers right around the 2% rule.

$ 800 Rent - 50% cost (does this usually equate the same for SFR or is it some what different) = $400 - $165/monthly mortgage should cash flow $235/month if I did that right?

I am thinking of taking out 25k in a home equity line of credit and paying off my 4k line of credit on the current rental plus 9k down for 20% and closing then the other 12k will be available for repairs. WOULD YOU DO IT? Or would you do it differently? Why am I so scared to make the jump?

Ask me anything I may have forgot.

Thanks in advance!