Need help determining my best financing option

[Michael Anderson]

All,

I am diving in the pool of real estate investing. I believe I have several options and would like advice on picking the best one. To help with the decision here is a little about my current situation. My wife and I both work professionally and have good secure jobs. Like many we have a fair amount of money in 401K, Roth, and traditional IRA. We have owned our current house for about 7 years and have somewhere between $150K-$200K equity in that. We have 4 kids, 1 in college, 1 junior, 1 6th grade, and 1 4th grade. The 2 youngest are boys and would like to teach them the building process. I should also say I have remodeled many homes over the years and even general contracted an upscale new one (my most successful endeavor). I have personal friends in real estate and building so have good connections there, and know the city code pretty well from my remodels. Finally, my goal is buy and hold but may do some flips up front to get the machine oiled. This should paint a good picture of where I'm at, now to my questions.

I don't have 20% down today to start my venture, it will probably take me until March to achieve that naturally. I would like to get started more quickly on my first deal. Here are some options I could think of in the order I feel may be best. Also if you are from Sioux Falls area, can you provide the best banking institutions to work with.

1. Should I open a HELOC on primary residence, enough to buy and rehab a property?
2. Should I look at borrowing against my retirement?
3. Should I do a cash out refinance on primary residence, enough to buy and rehab a property (I'm worried about tax implications here)?
4. Should I look for investing partner, family, friends, etc. (not crazy about doing this)?
5. Should I look at hard money or spend time on creative financing (don't like the risk and expense on a first deal)?
6. Should I wait and save the money needed for the 20% down (don't like waiting, winter may produce some good deals)?
7. Probably hundreds more ideas, please guide me ....

All help and guidance is greatly appreciated.  :)

[Michael Anderson]

All,
I appreciate all the guidance and advice offered. I wanted to provide an update on how I'm doing on my goal. I have been carefully studying and progressing on my property investing journey. I am just crossing the threshold now from wanting to having property. 

First let me know tell you my approach. I ended up setting up a HELOC and then working with a lender on pre-approval for consumer and commercial lending products. With my financial history I was able to structure financing where the HELOC can be used for down payment on new loans. I also aligned myself with a real estate agent and worked with him to setup a regular feed from the MLS showing properties matching my interests. I spent many many hours on Zillow finding possible deals and refining some spreadsheet tools that I will use for analyzing deals quickly. I spent time researching rent prices vs. property location and configuration.

I have purchase agreements signed for 2 duplex units (4 doors) that I will be closing on in the next 30 days. Having progressed to this point I now have some new questions for all or you.

1. Can you recommend good insurance companies for investment property.
2. Can you provide strong rental agreement templates and examples.
3. Can you recommend electronic payment companies for renters to pay through.
4. Can you recommend property management software packages.

As always I greatly appreciate the help!