Austin/Round Rock, TX, here's my story including details on my first investment.
Hello everyone.
First things first, ive been reading tons and tons of info from this site now for about a week and Im glad to be a part of it. Im originally from the east coast and have been living in Round Rock for the past 9 years.
My goal is to buy and hold properties, make enough cash flow to live off of eventually so I do not have to be stuck in the rat race anymore.
I work for a software company in Austin.
Real Estate background:
Bought my first house 9 years ago. Which Ive been living in since.
Bought a foreclosure in early 2009 for 80k in the area, and owner financed it for 105k literally a few weeks after closing. Did this doing a wrap around mortgage. It seems many people are scared of doing a wrap however I successfully pulled it off and have not had any problems with it for 5 years. I was only able to do this working with a real estate lawyer who actually specializes in wrap arounds. My buyer has had 1 late payment in the 5 years. I feel I got super lucky with the couple that purchased the home. Ive been making $150 cash flow on it per month since and am waiting for my buyers to eventually refi out so I can get the 20k in equity I have sitting in it. I did all this with 0$ down. Not huge cash flow but considering it only took time to set it up, no maint costs and im making money off it with equity waiting for me one day, I think it made a great first investment. Looking back, I definitely could have structured the deal to make me more money but I was young and wanted to get rid of the property asap because I didnt want to pay holding costs not even for 1 month. You live you learn i guess!
I lost touch with real estate investing since that 1 deal I did a long time ago and im ready to get back in the game.
Here are my options Im currently flirting with:
Option 1)
I recently refinanced my house at a super low rate and would like to rent it out in which I will make good cash flow. When I do rent it out, I intend on buying a new house with the intentions of making it another rental in the future or a nice duplex to live in one side. In which I will just rent out all of it once I have enough money for another down payment.
Option 2)
Stay in my current home and keep paying my awesome low mortgage payment. Use the savings to save up more money to put a 20% down payment and get an investment loan via conventional lending. Im really liking the idea of a duplex but would entertain an SFR if a great deal comes up.
I just dont know which ones of those I want to do yet. I guess mathematically speaking, it would be best to rent my current home that way that guarantees me an investment loan with a great rate and cash flow for sure. Problem with this is I feel I have to wait until my first year is up because it makes me nervous to make it a rental before I lived in the house for a year because of my new refi. My first thread I created on this site actually touches on this very subject. I want to buy something new now!! 3 to 10% down payment would be much better for me then the 20% investor loan.
Anyhow, sorry for the long post. Look forward to reading more.
Joel