Advice/Out of the box thinking/Reality

[Jack Dougherty]

Hi community,

I purchased my first home at the age of 23 this past February. It was a short sale that took about 10 months to complete (very ugly long short sale but I'm now a pro in short sales!). That being said, those 10 months of uncertainty were worth the wait. There is $100k of equity in the home. I work full time (gross income $40k annually), just started a property management business (gross income $15k annually). 

My mentor is suggesting to take the equity out to buy a multi-unit property, while keeping the first property and rent out the rooms to maximize dollars. He is saying I should be able to afford something between $300-500K and says I should be looking for a 4 unit property. My goal is to keep increasing my monthly income with this move as apposed to "flipping" so I can quit my job and keep investing in properties. Once my monthly income is high enough for my liking, I would consider flipping. I am very blessed by stumbling upon the short sale and the help of my mentor

Does anyone have any advice for me? I am very blessed by stumbling upon the short sale and the help of my mentor. Does anyone have any other ideas? How realistic is all of this?

[Patrick Liska]

Out of that 100k equity you will be able to borrow probably 70, so 500k may be pushing it unless you have more money or you are going to live there and qualify for an FHA loan at 3.5% down. you could safely get a place for 300,000 / 20% down. using equity to purchase more income producing property is the way to make money without using your own, that instant equity was a great buy.