10 Year Plan. Does this make sense to you?

[Curtis H.]

Hello fellow BP members, 

Does this seem like a good plan for someone who invests part time while having good W2 income and excellent credit?

This seems like a very good strategy for building capital over a 10 year period. In my case...

- I bought a beat up home Sub2 in a great area 2 years ago and fixed it up while living in it and built up $200K in equity. I have satisfied the capital gains requirement and can move on to next house.

- I find another beater in a good area and do it again, while renting out the above house for 2-3 years (I still won't have to pay capital gains when I sell). The cashflow would be minimal, but it would cover the PITI which is my main goal while building more equity.

- Sell the first house and probably net $250K-$300K in profit. I now have been in my 2nd home 2 years, and have satisfied the capital gains requirement. I can move from here and rent it out like I did the first. 

- Rinse and repeat. 

Now this house I'm in currently obviously has benefited from the huge appreciation levels we are seeing in CA. So I don't expect those gains on the future homes, but still they will be nice gains. I would expect $100K in equity per home I sell since I will always buy them beat up and add value, as well as capture appreciation for 2 years. 

- Added bonus would be to take a HELOC out on primary residences during that 10 year period to buy rental properties out of state

Am I missing something here? If people don't mind moving, this seems like an awesome way to go.