First investment property REO?/ New member intro
Hello everyone. This is my first post, look forward to learning a lot here. I've been interested in real estate investing for a long time, and have taken the idea off the back burner. Here's a little info about myself
30 years old, married, combined income $150,000 ish. No 401k, No IRA (plan on starting after we own a home, but neither of us have 401k matching anyway) about $20k in private stock investments, and another $15k cash (the wedding and honeymoon took a chunk). I was recently promoted and my wife is looking at a promotion in Feb. We live in NYC metro area so we were living paycheck to paycheck till this year (monthly bills are around $6,000+). Starter homes where we live in a safe area are $400,000. Currently rent $2,400 month. We hope to move within the next year, so for now we plan on continuing to rent. Our only debts are 2 cars ($24k total), and my student loans ($400 a month) credit cards have been paid off. With the promotions we now have an extra $2,000-$3,000 extra each month which we're saving like crazy for 20% down on a nice primary residence.
I've been considering purchasing an REO in my old hometown. I like that they only require 10% down with no PMI. My father is newly retired and pretty much the best handyman I've ever known, I figure I can take full advantage of his skills and have a property manager type as a backup. I also have a great real estate attorney who is a friend and I have some connections within the state who work directly with tenant/landlord rights and evictions so I can gain a ton of information from them should it ever come up.
I still have some more homework to do before I jump in fully, but one of the places I have my eye on is currently around $110,000k this would require a downpayment of about $11,000. I'd want an extra $5,000 for closing costs or surprises. The HOAs are $150 and the taxes $3,000. All in this place would cost about $900 a month and other condos in the same neighborhood rent for $1,100-$1,350. (this is in a safe town with a great school district)
Am I off to a good start? Part of me feels like I should have another $20k saved up before I even consider doing this. Is an REO condo a good first investment? Should I scratch this whole idea till I own my own home? Like I said I still have a ton of homework I want to do, any suggestions or links I should be reading through would be very appreciated.