What should I do moving forward?

Question

Hey guys - looking for some advice on how to invest my current cash.

I am a Realtor in Cincinnati so I can purchase homes and take commissions on them for free minus paying the buyers agent, please keep this in mind when reading. I have 20k in savings, I own a house which I paid 186k for, I have done numerous updates and I could probably sell for 240. I bought this house 7 months ago. I don’t really want to rent it because it’s very old and a little sloped as most houses 115 years old are. I don’t know how much worse the sloping will get over time so I’d rather offload it sooner than later. However, it would rent for 1900 and my mortgage is 1100. Should I keep stacking cash, wait until my 1 year mark on this house, sell it and buy a new primary? What strategy would you do given my situation wanting to be a RE investor. (I really wanna do air bnb too)

Let me know! Thanks!

Jordan Fiore · Answer

I would do this as well. The $1900 for potential rent with $1100 mortgage/taxes/insurance is nice, especially since this is a single family home and tenants will take on ALL utilities.

Caleb Brown · Answer

I'd hold it. Rent it out. Verify rent from a PM. Find another house hack and do the same thing. Do that 2-3 times and you'll have a great start. Then you could go more creative on the financing. You could also do a HELOC with the equity you have

James Robert · Answer

That is a good idea. When you mentioned heloc, what would i use that for? I really wouldn't need that to acquire my next house if I am doing a conventional primary loan

James Robert · Answer

Do you think I should move houses to a new primary and rent this or maybe sell it, OR use a heloc to buy something with 20% down that I wouldn't have to live in and start Air bnb;ing it right away?

James Robert · Answer

My girlfriend pays half the mortgage on this house so I only pay 550. I could buy a new house right now and roll a full 3% commission into the downpayment so I would only be putting 2% of my own money down. Bonus if i can get seller to pay closing costs.

I have 20k saved. It would not take much to acquire a new house on a conventional loan thats why it is very tempting

Jeff Lang · Answer

For how you've laid this out, it's sounds like a home run for a house hack. If you want and are able to get a person to come rent a bedroom now, you could decrease the mortgage payment you have right now which would allow you to save up more money for a down payment on the next house. If you haven't read the House Hack book, I suggest you do that.

https://store.biggerpockets.co...

Scott E. · Answer

You've got about $44,000 in equity and you're cash flowing around $400 per month (I'm assuming some repairs/maintenance/vacancy).

This means you're getting a return of over 10% on your money right now by hanging onto this property and renting it out.

As the other posters have said, probably best to hold this one as a rental unless you think you can do better than 10% with another property.

James Robert · Answer

I can sell them for free minus paying the buyer agent 3% *****

What should I do moving forward?

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