What’s next? How do I prepare for next purchase?

[Sheena Lee]

This year was big for us. We refinanced our primary home, pulled out all the equity, bought a new house for ourselves, and rented the first one out. Then we bought a triplex in November. I’m the property manager and enjoying the steep learning curve. The ultimate goal is to work for myself managing our properties. I have a medical condition that will cause me to leave my day job eventually.

Although not ready to buy yet, I want to get to work preparing for the next property. Basically I need to get our triplex self-sufficient, get cash flow up a bit, and save $ for the next property.

What’s the ideal step for that next property though, hopefully in 2-3 years time? Save money from personal income? Refinance and pull out equity from somewhere? Our primary residence could be renovated and re-fi. I already know the market I would be looking in for the next buy. Just need to prep financially. Any good ideas/suggestions?

[Corby Goade]

Saving cash is always a good thing. I'd start doing simple, inexpensive things to create equity in your properties- paint, carpet, updated light fixtures, etc. When you are a couple months from another acquisition, open a HELOC on the properties that you have an appropriate amount of equity in- use that money either for a down payment or cash in full on your new purchase and do a cash out refi after six months so you can pay off your HELOCs and roll that equity in to your next property. Good luck!