Selling to buy another property... Is it reasonable?

[Rowan Yearwood]

Hello BPers!

So, I was looking at my property portfolio growth plan I made when I was brand new to real estate investing and I noticed that my plan was missing a very important part... How am I going to afford the down payments on this properties? I don't know how I managed to miss that but I did. I spent an 30 minutes staring blankly at my computer screen, trying to mentally refer back to what I had read in Brandon's book "The Book on No & Low Money Down Real Estate Investing". 

Then, I started to wonder, "Why couldn't I just sell the house later on and use the money to buy a house?" Now, this is where I need help from you guys. I was looking at selling at the two year mark but the rational side of me says that there's no way I can make anything off a ~$100k property in just two years. Then again, I've never sold a property before so what do I know? 

By the way, I'm not making a lot of cash from work. Enough to live, yes, but not enough to afford a 20% down payment which is why I'm trying to find a different route.

[Corby Goade]

Most people here grow their portfolios through leverage. If you combine finding and buying great deals, adding sweat equity or forced equity, you'll create equity in those properties much more quickly than waiting for inflation or appreciation. Assuming you have good credit and some experience, a lender will loan you money against that equity- that loan becomes your down payment for your next property. In my mind, the best bang for your buck on residential is a HELOC for many, many reasons. Best of luck!