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Updated almost 3 years ago,

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4
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David Jones
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4
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Looking for advice on future investment property financing

David Jones
Posted

Just sold my house that I owned for 3 years. Put $25k improvements in it, and cashed out with $125k thanks to the market leap.

Now planning on buying a 4-plex that lends me cash flow of appx. $800/mnth and a CoC return of appx. 8.73%.

At same time buying a primary residence with very little down, so a bit higher for the monthly note, but it has a de-tached backhouse I could rent out for maybe $700.

This will leave me with very little initial savings, but I am wanting to know if I'm backing myself in the corner.  My goal is to buy 2 or 3 investment properties over the next few years.  I'll have 100k in equity on a home (4 plex) that is valued around 400k today but the area is growing.  But in order to buy that next investment property, I'd have to put 25% down on it because I likely won't move out of my primary residence.  I'm hoping the 4 plex value grows in the next 2-3 years so i can take that equity out and buy the next one.  I'm wondering if the pathway to multiple properties is to just keep taking equity out and buying, renovating, and renting, then take equity out of that one and keep the train going?  Is this normally what occurs for folks without a lot of upfront capital, or are there other ways to go about it that don't entail relying on your equity?  

Sort of a broad question, I know.  

Thanks

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