Next investment advice...

[David Rutledge]

I apologize for the long post but I was hoping to get some opinions and advice from some other investors.

I am very new to the investment game, I have been saving for years and last year I bit the bullet and purchased two investment properties out of state (I live in OC in CA). I have been really pleased with my two purchases and I have experienced positive cash flow on both my properties. I bought a SFR in Charlotte, NC and a duplex in IN. I have two great property management companies in place in each state and I am very happy with how everything is playing out thus far.

I still have around $25000 - $30 000 left in savings and I had always planned to make another purchase this summer. I only have enough for one more purchase for the foreseeable future. Until I can get a home equity line of credit or refi on one of my loans etc...

I had always thought I would simply go ahead and purchase another out of state investment that will immediately cash flow (Ideally a multi family if possible). If I was to do that I would be looking at something worth around $100000 and would need to put a 25% dep down which in turn would wipe out the rest of my savings.

An alternative option that I have been researching more lately would be to take out an FHA loan and actually buy a primary residence in the OC or surrounding areas which I would live in and possible rent out any extra rooms for a few years before turning it into a rental. This way I can leverage my savings by only putting 3.5% down and purchasing something worth up to $400 000. The down side is of course that my rental income would not come close to meeting the mortgage and I would obviously be unable to cash flow.

My plan moving forward is to build my real estate portfolio as much as possible so the idea of leveraging my money to purchase more valuable real estate is appealing to me in the long run.

I am just in the beginning stages of figuring out my next move but these are the two options I am looking at. I would love to hear some advice or insight from others with more knowledge and experience than myself just to get some different opinions on what you guys feel would be a smart strategy for me at this point. 

Any advice or guidance would be very much appreciated.

Thanks so much for reading.

David