All Forum Posts by: Trevor Riley

Yes, it would just be savings! By the end of the year, I should be able to have about $60k for a down payment. That's pretty much what I was planning to do. Going to be looking for something that is middle-of-the-road shape but in a good area and over the next few years do some improvements where I can to add value. Maybe that house could be a rental down the road, maybe not. But that was 100% my plan. The HELOC may come in handy tho once the 1st rental is up and running.

@Josh Myrick So you think that I should go with a HELOC as opposed to just waiting about 6 months to buy my next property? Really wanting to start off kinda slow here and work my way into it. Looking at my next home to be one that I stay in for quite some time and potentially have children in. My primary interest in it would not be to have it as a rental, that may be something that works out in 5 ish years but definitely not looking to house hack a duplex or triplex at this point in my life. My plan would be to buy another home, get the one rented that I'm currently in, and then save up to get another investment property after that. Maybe at that point, I would be willing to do the HELOC on my rental so I can get a second investment property quicker?

@Jake Knight I do believe that the value of my home will continue to rise. My area is semi-crappy at the moment and don't believe there's much room for it to get worse. There is the potential for it to go down if something catastrophic happens to the market. I was planning to self-manage my home at least for the first year. I can imagine that there are plenty of issues that will arise. I am not against having a property manager down the road but I definitely want to give it a shot on my own before I resort to that. 

To be honest I had not thought about a HELOC. I really had in my head that I wasn't wanting to take on additional debt at the moment unless it was my next house. I am thinking that $40k won't be enough for the next house but I believe by the end of the year I can have around $60k for a down payment which puts me at a $300k house roughly, if I'm doing 20% down. Surprisingly $300k can get you a decent house in Indianapolis haha. Ultimately wanting to buy a house in a nicer area that I can work on and make another couple of bucks on down the road. The idea of taking more debt out, in my head, is going backwards unless it's going to increase my income as well. I could be wrong tho. That could definitely be an option tho. I really appreciate the insight.

Hi Bigger Pockets Community,

I am new to the real estate game and by new, I mean I haven't done a single thing yet besides reading some books. I'm trying to figure out what I should do with my current house before that time comes. Bought in a semi-bad area of Indianapolis because I got a killer deal (fully rehabbed home for $82k). Deal with the city also meant that I had to live here for 5 years and this month I reach 5 years. Ultimately I want to go out and buy a home in a nicer area to live with my lady and start to get into real estate via rentals. I owe $60k (15-year mortgage that I refinanced last year) on the house and I believe it to be worth right around $200k in today's crazy market.

Scenario 1 - Sell the house and profit roughly $120k. Put some of that into my next home and some of that can be used to find a rental property down the road. (I also have about $40k that I was saving for the downpayment of my next home).

Scenario 2 - Keep my current house and rent it out. Mortgage taxes and insurance are $680. It is the nicest house in the area, everything was updated 5 years ago. I think I can rent it out for roughly $1,400 a month. The area is getting nicer every year and eventually, I believe it will be a great place to live so I imagine that it will still appreciate from here on out pretty well. At the same time, I will be going to buy another house to live in, in a nicer area. 

Really been going back and forth on the idea and I am needing to come to some conclusion soon. I had told myself if I could get over $150k profit that I should take it and run but I don't think we are quite there yet. Love the idea of having rentals and ultimately that's what I would like to try out down the road. Any guidance is appreciated here! Thanks