If you were me . . . choose your own adventure!
Hi guys, I'm in the midst of creating a plan for my investments and I'd like to see what you think - you guys have been EXCEEDINGLY helpful in making me think bigger than I imagined so far, so wanted to put this out there.
Things to know before I launch into the plan:
- My husband and I are both bringing home entry level salaries for our area thanks to being executive directors for a non-profit we started. We have no other outside employer.
- We own another business that in 2012 showed too much of a loss to qualify us for conventional loans. This year we show a profit, but our loan officer told us we needed to wait until 2014 returns were in to try again using conventional routes. 2014 numbers are looking to be more than double what we take home from our salaries.
- We are currently renting way below market. We could not remotely secure a mortgage for even twice what we pay in rent right now.
- I have a fantastic spreadsheet and have been doing market research, everything I say below is pretty much what the picture looks like for me unless I get lucky and find something way undervalued. You'll have to trust me there.
- My long term goal is cashflow and the purchase of ag land as a primary residence in town (about $1,000,000 price tag on that baby) while not being land-poor.
- Buy a USDA-0% down eligible property, preferably with enough land to stop having to pay for rental space for our business' equipment and take the write off. The mortgage would cost at least twice what we pay now, but I guess we're not renting. Sell in a few years when the market is right and hopefully end up with enough cash to both buy a new place and invest for cash flow (my primary objective).
- Buy a multi-family FHA 3.5% down property in town and live in it. The mortgage would be closer to 3x what we pay in rent now (aka, our debt-to-income would be pretty ridiculous and not sure how that works with multifamily - does the lender look at the rent income as something they count when working that out?), and pretty much no chance at a positive cashflow there. Same as above, we'd have to move out after a couple years and hope it made enough money to invest again.
- Keep renting and buy in a lower-value area where we can afford 25% down and get positive cashflow in the first year. Keep investing money in more homes and wait until cashflow is high enough to secure a loan above (are we even eligible for loans like that if we have conventional loans to start?) to invest in town (likely as a primary residence).
I am thinking the last one makes the most sense, but as I said, you guys tend to open my eyes to the possibilities and I would love your input.