Aspiring investor from Turlock (Central Valley) California

[Tim Palecek]

Hi everyone!

I'll try to keep this short because I could really type a wall of text here. My name is Tim and I'm 25 years old. I have been interested in real estate since I was probably about 16 years old. I'm finally at a point in my life where I feel I can pursue my real estate dreams at least part time. I've been researching REI for quite a while, reading blogs, listening to podcasts, and hundreds of google searches usually beginning with something like "How do I...." or, "Should I...." A majority of those searches brought me here, so I thought it wise to pay Bigger Pockets some attention.

After 8 months of looking and waiting for a great deal, I purchased my first home back in July 2013.  Because of the great price I received, some renovations, and inexplicable(to me at least) appreciation I seem to have $70-80k in equity.  After a lot of research, it seems like a great idea to put part of this equity to use through cash-out refinancing and using this capital to invest in a flip house.  My long term goals however are to build up a portfolio of rental properties for long term cash-flow.  Now my goal is to figure out what path to take to get me there.

Thanks to the BP community for the vast wealth of knowledge present here, it is truly invaluable!

[Craig Shute]

Tim Palecek
If you're looking to do a flip, I would get a home equity line of credit rather than doing a cash-out refi. I got one where they paid all the closing costs and the first 6 months is a half percent interest and prime plus 0.25 thereafter. The advantages are low or no fees, less paperwork, and you only pay interest when you're using the money. Plus with mine I can convert to a 15-year fixed whenever I want to without paying a fee.
A cash-out refi would make sense if you have a high rate on your existing mortgage but since you bought 2 years ago your probably don't.