Fixer upper or Good condition house for Rental

[An Nguyen]

Hey everyone, 

I am learning to get into RE investment field, my plan is taking out equity of first primary house to buy another one for rent (single or multi family). My primary house estimate value is around $450k, I still owe $60k for mortgage, and I have $45k in high yields saving now. 

For the last few days I have done some research for fixer uppers projects BRRRR, my lender recommended go for HELOC because we try to keep expenses downs and easy to access the funds. And or course, short term loan for HELOC and then refinance later. But I have read many topics on here, many investors facing difficulties with BRRRR now as the market is "not right" which make me have to think again about this strategy. (70% rule still working for this market?)

My second option is no Fixer-uppers and just buy good condition house for rental investment. But by this way, I do not know if the equity can increase more than BRRRR strategy when refinance or NOT since there is no rehab involved.

With HELOC, I think they allow me to take out 70-80% of equity which will be $250k-$300k. What should be my next move? I am ready for any advice and tips from everyone.
Thank you

An

[Jonathan Greene]

You have very strong equity in your current home, but you don't want to burn it all and make your house worth less with more leverage. My concern in your post is this - "For the last few days". Is that all the time you have been doing research on this? If so, do not take action yet, you don't know enough. This is a good place to start, but why do you want another property? Do you have experience with renovation or landlording or mini-flips? Your capital is available to do it, but that doesn't mean it will work out well. It's not a great time to BRRRR so if buying something more turnkey as a newer investor is safer if you see appreciation in the future and you plan to hold in a long-term strategy.