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Greta Hansen Begg
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Picking the best path--First REI

Posted Jan 22 2022, 13:44

I live rent free (trade work hours for rent/utilities on an animal sanctuary) in a very low cost of living town in southwest New Mexico. Also generally low wage/poor/fixed income population. Mobile homes and SFH fixer uppers are for sale at higher prices but I can still find 1% deals. My husband and I have time/motivation/repair skills and are making connections for a talented handyman and getting a team in place for repair that is out of our wheelhouse. Local landlords have shifted their LTR into STR and now LT renters struggle to find a place. Airbnb is oversaturated, LTR are in high demand. Town has class b/c/d. FMR for 3 bd is $981. Comps I find for 3/2 in class b rent at $1200. The following two scenarios are what I mainly have to choose from and I would like to invest here in town. Huz works full time/my work is flexible, but updating/renovating work will mostly be weekends.

A. 3/2 newer MFH in a class c neighborhood asking 89k. I think we could get it rented right away at $1000. I'm new to all this with just a book read and watching a landlording facebook group-- but based on book knowledge I calculated the cash flow at $100. I could add value by updating appliances/fixtures.

B. 3/2 SFH fixer upper in a class b asking 89k. Needs roof, drywall repair, more but foundation is OK. Has a 16x16 shedthat I could add value by converting into a casita for additional/separate tenant income. Some space can be made into a 4th bedroom and covered patio. Fixed up, will be a good flip option or excellent hold as a LTR.

C. Duplex or 4-5 unit complexes are rarer but can be found if we're patient. I need to better understand how to fund a deal like that but it seems doable. My dream would be to buy a mobile home park that I rent each MFH. In the future. Right now I am still working to make my first deal!

I haven't yet delved into the lending side yet but our credit is excellent, no debt, no mortgage, have saved for down payment and have funds to get started on some deal. But what? This is where I'm stuck. What path to take? 

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