Multifamily investor, and single-family houses

[Calvin Liggons]

Looking to connect with someone that can provide me direction on the safe way to invest in my second property. Just a little lost. 

Calvin

[Jayson Mickle]

Quote from @Calvin Liggons:

Hi Jayson, 

My first property is a duplex slab. I have paid it off, so the property has equity. I was wonder how should I go by purchasing my next property?  

It sounds like you have done a great job acquiring and paying off your first investment property. This is often the hardest step for RE investors to take so congratulations!

If you have a good amount of equity, which it sounds like you do, I would recommend creating a line of credit secured by your first property. This gives you the freedom to take your time finding the next deal. If you do a cash-out refinance, then you begin paying interest immediately and may feel rushed to put the capital to work on your next deal.

Also, when you make an offer on a new property with a line of credit to fund the deal you can close much quicker than with most traditional financing methods. This allows your "cash offer" to be very attractive to the seller.

If there are deals available similar to your first property, it is always easiest to stick with similar products, as you have already built a wealth of knowledge through your experiences with the first deal. You could try to purchase a 3 or 4 unit property as your second investment because you will still be able to use non-commercial financing when you decide to refinance after your initial purchase and rehab that you will use the line-of credit for.

As you probably know, there are countless ways for you to move forward and that can make the next step seem overwhelming. My suggestions are just one option, based on what you have told the community. This is what I would do if I were in your shoes. If you have your eyes set on a different type of property or want to dive into a much larger multi-family project that is fine too! Feel free to bring your ideas and questions back to Bigger Pockets so we can help you avoid hazards investors in the community have dealt with in our own journeys.

Good Luck!