Second Property Purchase

[Tanner Holligan]

I currently own and rent a property I purchased 3 years ago on a USDA loan in the Mont Belviue area(just east of Houston), and cash flow 475 a month and am currently in the process of purchasing my second home in the Montgomery area(north of Houston) that is a new construction home. My plan is to live in this home for a year and repeat this process, but I am a bit outside of my financial comfort zone by pushing my DTI this way to build my portfolio. The vacancy factor for my property in mont belviue is covered by the rent but still makes me uneasy about purchasing a second home with the potential of maybe having to cover two mortgages and tapping out my reserve funds I have for the property (roughly 3 months rent). I'm not sure if this is a normal thought process and comes with the territory or if I will be making a big mistake. Thank you!

[Matthew Rolf]

@Tanner Holligan will the new construction cash flow at all when you move out?  I think the combination of little to no capex on the new construction in the first 5-10 years, Montgomery being a good area, and new construction renting easily should all benefit you.  Maybe build up reserves a little more before going to property number 3?