Newbie from Bountiful, UT

[Scott Turner]

Howdy. My name is Scott Turner. I'm married, have a bunch of kids and am in my 20th year in my career as a software engineer. I am seriously looking into real estate investing. I'm not yet an investor, but got interested while attending a seminar a few weeks ago (a Strongbrook affiliate). Since then, I've been absorbing all the info I can. I discovered the BP podcasts and have listened to several. I have read Kiyosaki, Napoleon Hill, Dolf De Roos, and others, have stared the conversation with neighbors and friends who are into REI, and gotten on the daily MLS hotsheets to start learning more about real estate in my area. It feels like there is still so much to learn, but I'm encouraged by my progress so far!

My goal is to eventually have a real estate portfolio that would create a passive income stream of at least $10,000/month. This seems like a long way off, particularly where I'm still evaluating risks, strategies, and trying to make the numbers work out. I'm sure there are many here that can help answer a couple of questions that would help me figure out how I will move forward from here.

As I've been number crunching, it seems like the market in Utah right now isn't a great place to enter. I might be overlooking something, but it seems like home prices are very inflated right now (bidding wars above the asking price are common), and rental rates seem insufficient to cover PITI when factoring in CapEx, repairs, vacancy, property management, etc. Having a hard time breaking even. Has this been anyone else's experience here in Utah?

The next question is with regards to financing. I could leverage my 401K or whole life policy, but my greatest source of funding would be a HELOC on my paid-off home. I've encountered two extremes to HELOCs. The first says to NEVER use a HELOC to start real estate investing. The suggestion there is that if you haven't been able to save up the cash to put down your a downpayment, you're not ready to start investing and you're setting yourself up for disaster. The other extreme is to leverage EVERYTHING you can to purchase as many homes as you can as quickly as you can. This is aggressive, and though I've heard it can be done with little risk, it still seems to me that the risk of default is quite high. My comfort zone leans more towards the first extreme (Don't leverage the value of the home my family is using for our primary residence), but Rich Dad seems to be telling me that my home equity is money that is not working for me, making the paid-off home more of a liability rather than an asset. I'm really conflicted on this. What advice would you have with regards to this newbie considering a HELOC to start building my real estate portfolio?

I also feel like I want to figure out my exit strategy before I even begin. Is this typical? It seems to make sense to have the exit part planned out before starting, though I realize it is likely to change over time.

By the way, am I doing this right? It's my first post on these forums, so hopefully I'm not jumping the gun by tossing my questions in with my introduction. Anyway, hi! Thanks in advance for your comments and replies!