Personal and Loaned Money Investment

[Account Closed]

Hello Hello, fellow real-estate enthusiasts!

I'm a new face here so I thought it would be good to start a discussion and learn something while meeting new people at the same time.

So, let me explain where I come from. 

I'm Nuno and I live in Lisbon, Portugal. I'm currently developing my own business, outside real-estate (video gaming industry) and have no profit from there yet. So, I live off passive income from two rental properties that I own. 

Now, in March I'm selling one of the houses (only 50% mine) and want to reinvest the money back into real-estate, specifically into a two/three-bedroom apartment and I have two options:

a) buy one property with my own money and keep 100% of the cash flow (which I need); 

or

b) ask the bank for two loans, buy two-properties and use part of the cash-flow to pay off the debt.

I'm inclined to go for option b for obvious reasons, but I've never asked for a loan before, so I'm kind of nervous about the compromise. I think I can get enough cash-flow from the two new properties (plus the other one) to survive, but I sometimes feel that I might be stretching a bit much for my experience. 

What do you think?

Any advice on things to look out for, like commons mistakes or things people usually forget?

Thanks in advance to all of you who are taking your time to read this.

All the Best,

Nuno

[John Mathewson]

Depends on how you look at it. If you are going to but a property that doesn't need money put into it or some type of rehab then for the most part you are going to be paying retail for the property. Maybe you get a good deal and end up paying 85-100% of what it's worth. 

If you buy a property that needs work you can buy it for 50-60%LTV then put some money into the rehab and now your all in for 70-80% LTV.

I don't think you will find the loan amount to be bigger again because if you're buying a property that doesn't need work you are already going to be paying more for it from the beginning. I believe you will be all in cheaper and lower LTV. Unless i'm missing something or not understanding correctly?