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I have a paid for 2nd home worth 300,000. How would you grow that?
Posted on 7/6/26 at 3:29 pm
Posted on 7/6/26 at 3:29 pm
We were looking to move up in house right before covid. Home prices exploded and it no longer made sense. What we decided to do was cash out refi our primary home to build a 2nd house at the lake. We took 120,000 in equity out and paired it with another 80k of our own over a couple years and built a home that is worth right around 300k. I'd like that equity to continue to grow more aggressively than any other complicated/risky venture.
The most attractive thing to me at this point is to take equity out of the paid off home, build another one just like it, sell it, rinse and repeat over the next few years. I should be able to work with our contractor and build this one faster now that I theoretically have access to all (or almost all) of the funds up front.
Anyone with any experience in something similar - I'd appreciate any suggestions/advice. HELOC? Cash out REFI? Partner with the contractor (for potentially lower construction cost) and split the profits? Do this through an LLC? Do something else all together?
The most attractive thing to me at this point is to take equity out of the paid off home, build another one just like it, sell it, rinse and repeat over the next few years. I should be able to work with our contractor and build this one faster now that I theoretically have access to all (or almost all) of the funds up front.
Anyone with any experience in something similar - I'd appreciate any suggestions/advice. HELOC? Cash out REFI? Partner with the contractor (for potentially lower construction cost) and split the profits? Do this through an LLC? Do something else all together?
5
Posted on 7/6/26 at 4:35 pm to meAnon
Turn it into a lake house brothel
Posted on 7/6/26 at 8:07 pm to SuperSaint
- HELOC if you can find one on a 2nd home. I’m commercial lending so not sure if that exist on consumer side or not
- set up an LLC
- partner with the builder but maintain all control. And when I say partner don’t give them ownership in LLC, give them a cost plus say 10% contract to build (or something like that) and then dangle a carrot in front of them (through a formal agreement) where they then get 25% kicker of the net profit when sold.
- obviously the key is least leverage as possible in case it sits and you have to fire sale it. And always look at it as a rental in a worse case scenario. If you can’t sell it and have to hold it, what’s the monthly cash flow look like.
- set up an LLC
- partner with the builder but maintain all control. And when I say partner don’t give them ownership in LLC, give them a cost plus say 10% contract to build (or something like that) and then dangle a carrot in front of them (through a formal agreement) where they then get 25% kicker of the net profit when sold.
- obviously the key is least leverage as possible in case it sits and you have to fire sale it. And always look at it as a rental in a worse case scenario. If you can’t sell it and have to hold it, what’s the monthly cash flow look like.
Posted on 7/6/26 at 9:24 pm to SuperSaint
quote:The Trouser Trout Trap
Turn it into a lake house brothel
Posted on 7/7/26 at 12:16 am to meAnon
Greed is an easy way to go broke. If it was that easy, all the parties involved would do it for themselves for a bigger margin.
New home sales are way down.
New home sales are way down.
Posted on 7/7/26 at 5:51 am to meAnon
quote:
continue to grow more aggressively than any other complicated/risky venture.
“Grow more aggressively” and “risky venture.”
There is no free lunch as far as risk goes.
It sounds like you have some aptitude for building/flipping houses.
Of course, there were some things that inflated home prices since 2019.
There may be periods where housing prices are not booming.
Sometimes people end up doing something that works at just the right time.
Sometimes doing the same thing at the wrong time can be less profitable.
Posted on 7/7/26 at 7:13 am to makersmark1
I'm not trying to get rich quick here-i like houses significantly better than playing in the stock market, have had some pretty good success in a few over several years, and there is a niche market in my area where it seems this is a good opportunity. Just never had the time or resources to do anything consistently.
Posted on 7/7/26 at 7:16 am to AUjim
[quote]I like houses significantly better than playing in the stock market,[/
It sounds like you know what you are doing.
I’d be lost in rental real estate.
It sounds like you know what you are doing.
I’d be lost in rental real estate.
Posted on 7/7/26 at 8:27 am to meAnon
I had a friend start doing this about 5 years ago. He declared bankruptcy last year and is currently homeless. Smart dude, too.
Posted on 7/7/26 at 8:40 am to AUjim
quote:get a residential GC license and do it yourself
I'm not trying to get rich quick here-i like houses significantly better than playing in the stock market, have had some pretty good success in a few over several years, and there is a niche market in my area where it seems this is a good opportunity. Just never had the time or resources to do anything consistently.
Posted on 7/7/26 at 7:57 pm to meAnon
Sell the house.
Split the proceeds between VOO and VGT.
It’s not hard.
Split the proceeds between VOO and VGT.
It’s not hard.
Posted on 7/8/26 at 11:27 am to makersmark1
quote:
I’d be lost in rental real estate.
yes, yes you would.
Posted on 7/8/26 at 11:37 am to Fat Bastard
quote:
yes, yes you would.
I agree.
I invest in what I understand.
Equities.
I live in a house that I own.
I’ve bought and sold one other house over the years.
It is what it is.
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