staring out buy and hold

[Ajeng (AJ) S.]

Hi Everyone,

I am new to this site but have been listening to podcasts and doing research. I am now ready to start on real estate investing particularly Buy and Hold. My husband and  I currently own a home with 59k equity and would like to use that towards a second home. My question would be what is be the best way of using the line of credit or loan. We have been house hunting with our realtor. Our price range is 170-250k ready to move in condos/ townhomes. I prequalified for the loan and the mortgage. I understand if I add the equity loan or credit, it would change my debt to income ratio and reduce the amount of money I can get for mortgage but right now I could get up to 400k. Would it be best to

1. put 5% down, fix my current home, rent it out and move into 250k 2 beds 2 baths townhome condo and in a year, use the remaining loan/heloc for another home until I use up to 59k? I am not sure if moving every year would be hectic.

2. put 20% down, buy the 170k 2 beds 2 baths condo and rent it out immediately which would be more cash flow monthly.

3. is heloc or hel better in my situation?

4. if I take out my equity now, do I have to wait a period of time to apply for the mortage or can it be done the same time?

Thank you so much in advanced for your honest opinion!

Sarafina