I'm at a crossroad. I see a lot of people doing well in real estate and I see some of those people "borrowing themselves rich". I generally cringe at the idea of debt so as you'll see below you can imagine I'm a tense mess. While I try to be financially conservative I'm a bit insecure so I'm getting the itch and want to jump into something (with adequate due diligence, of course).
I start getting into real estate...erm, actually, I only have one property now. I bought a property in Detroit, MI for $41K. It's not a bad property and the neighborhood is okay. I'm just not making much money (if anything) off of it due to delay in getting tenants and then I had to do some upgrades and repairs. To spread out the risks, I want to take a HELOC on what I can of that property and use it for a down payment on a home in another jurisdiction. To be conservative, let's say the jurisdictions I've looked at would run me about $130K.
Here's some background to analyze the situation:
Take home pay (monthly) is approximately $3,930
Monthly bills (non-debt) is $903
Car payment is $336 monthly (balance is $9,416)
Credit card balance is $828
Secured loan I took to get the Detroit place is $125 monthly (balance is $10,353)
The credit card will be paid off this month and about $500 will be taken off the car payment and about another $150 on the secured loan.
My assets are as follows:
Emergency savings: $12,041
Savings for house: $7,060
Bond funds: $1,600 (est)
Brokerage account: $19,300 (est)
Peer-to-peer account: $8,285
IRA: $29,000 (est)
Deferred Comp: $1,000 (est)
Currency stash: $300 (est)
Silver bars: $1,600 (est source: Kitco)
Car: $10,000 (conservative est)
Detroit home: $31,697 (source: Zillow)
The question is, what should I do? Should I move forward and continue to add leverage? Or should I reign in this debt first? Thanks!