advise on RE purchasing

[Jose Vasquez]

Hello everybody, first of all I want to thank bigger pockets for this website there are so many things to learn especially when you're newer in this area. I am a 60 y/o man, I live in northern Colorado (Greeley) I need advice on how to proceed I currently have a primary home I also have a duplex (both mortgages), I want to improve cash flow and possibly purchase Investment properties, I can either refinance the duplex or take out a HELOC ($150,000 in equity), I can also roll over an IRA with approximately $300,000.

What should I do next? Refinance or HELOC or something else, on duplex? once I get that money and also the roll-over IRA = total approx. $450,000, what is the best use of this money? should I consider STR? or duplex/multiplex? I also need to consider tax implications... Open to referrals to a knowledgeable tax specialist/CPA.

TIA!

[Ben Rhodin]

Hey @Jose Vasquez! Definitely consult with a Tax advisor for tax-related questions. But you are in a great spot to start scaling your portfolio, and Greeley is a great expanding market that could get you there. 

As for your questions, my general rule of thumb is HELOCs are best served for short-term capital, and Refiances are best used for long-term capital. So I wouldn't recommend the HELOC for a downpayment unless you were rehabbing the property and planning to refinance shortly.

Your first step would be to get with a mortgage broker and figure out what your options are, as if you can qualify for conventional financing we open up a ton more options, than if you'll have to go the DSCR or commercial loan route. I agree with @Ben Einspahr that you should capture the low hanging fruit first. Are you able to reposition the duplex, as far as rental rates, or strategy in order to increase its cashflow? That won't cost you anything other than maybe some upgrades and furnishings, I know Greeley can do well for the MTR space, and have a few clients doing it up there right now.

Then the second option is your primary, can you move out of it, and get a new primary and make the current one a rental? That way you could take advantage of a low downpayment loan to create a rental unit, and if you buy a duplex or something with an ADU then you could create two with a single move.

Then after all of this, you can start thinking about the next steps, capital doesn't seem to be the issue, so I would focus on the financing portion and strategies from there. I am more than happy to discuss that further.