Indianapolis - What strategy would you do??

[Rodney Kuhl]

Been awhile since I've been on the site steadily. My wedding in a month is sure taking up a lot of my real estate time. Pretty good problem to have though I guess. :)

Anyway, I'm currently sitting in a situation where I'm not sure what to do. I bought my first rental in April and everything is going really well with that one so far. I want to buy a couple more before the year ends if possible. Being in Indianapolis, it's reasonable to buy a SFR for under $50k (I purchased my first for $47.5k and it's renting for $825/mo), so I don't need a ton of money to buy another. I currently have about $20k that I could move around in investments (stocks, etc) that I could use to purchase another property. Here is my question, what strategy would you do?

1) Buy another property, taking out another mortgage (my 3rd counting my residence) and put 20% down plus closing costs, origination fees, rehab etc. All of this, if I find the right deal, could be down for $14-15k or so. This is option 1.

2) Continue saving up and wholesaling (I have now done 2 deals with a partner and I'm working on more now) until I get to the point where I can buy a property with cash, rehab it using cash, and then pull all of the money back out with a HELOC.

Option 1 would allow me to purchase my next property soon. Option 2 would take longer to purchase another, but after my money would be pulled back out of the deal, I could reinvest it all and continue the cycle, acquiring a bunch of properties in a short amount of time.

What would you all do? What do you see as the downside to either strategy? Thanks a lot! (Sorry that got long!)