Is it time to try and make a move or should I wait?

Cincinnati, Ohio
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Is it time to try and make a move or should I wait?

Thomas Rodgers
Middletown, OH · Member since 2021 · 23 posts · 6 votes

It has been almost a year since I finished paying off my debt and starting saving for my emergency fund which is at about $8k now. I got convinced to take a pretty expensive vacation with my family this year which will cost about $6k which is gonna set me back a little less than a year from my goal of a funded emergency fund and a minimum of a 5% down payment on my first house, which sucks but is manageable. 

I have been scrolling through listings on Zillow and redfin to keep my eye on the market and to get a good feel as to what prices to expect and my current plan is to but a house that needs updated and to live in my first house to a year while making the updates to try and maximize the sweat equity.My spouse wants me to stay in the current school district which kind of makes things a little harder because its more of a rural area and there is another school close by. We are trying to stay in Madison school district which is close to Middletown SD but is advertised as not solely based on location which I still need to call and verify. 

I came across a house that is in that SD advertised as corporate owned and seller is treating it as a foreclosure and needs some TLC. List price $140k, 1400 sqft, 3 bed 1 bath, listed for 45 days. Only 2 pictures of the outside and it does not look too bad but no garage and close to a main street. All this to ask, is this something I should try and do something with? With the low down payment there would be much cash flow if any and really no comps to get an idea of what rents could be. All the rental calculators I have used range from $1350-$1050, Zillow ARV comps $150k-$210k. I was thinking about contacting the agent and trying to get some more information but I am not sure if there is anything specific I should ask. I thinking of asking things like what condition its in and if any seller type financing options are available to get me started or if I should still focus on getting my funds together and maybe just find an agent to send me listing in the mean time.

I am not sure if I am going about this the wrong way, if I should start going for things like this, or just wait until I have a stronger financial position. Any advice would be greatly appreciated.

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Michael Paling
Rental Property Investor · Gwinn, MI · Member since 2016 · 174 posts · 103 votes
3y

Congrats on getting your debt all paid off. That's a great foundation. If all you have right now is $8K, then I would suggest trying to get out of that expensive vacation. Is going on this vacation worth setting your future back by a year? Your family should be supportive if you explain your situation. Maybe there's an alternative vacation that's much cheaper for your family. 

It really sounds like you might want to build up your financial position a little more. If you're planning on buying a fixer upper, how are you going to pay for the repairs? Can you get an FHA 203K loan? a construction loan? private or hard money lender? Will you have enough money to cover unexpected costs?

If you haven't yet, try to find a local group of investors. You'll be able to get a lot of great info from investors that know your local market. 

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  • Michael Paling
    Rental Property Investor · Gwinn, MI · Member since 2016 · 174 posts · 103 votes
    3y

    Congrats on getting your debt all paid off. That's a great foundation. If all you have right now is $8K, then I would suggest trying to get out of that expensive vacation. Is going on this vacation worth setting your future back by a year? Your family should be supportive if you explain your situation. Maybe there's an alternative vacation that's much cheaper for your family. 

    It really sounds like you might want to build up your financial position a little more. If you're planning on buying a fixer upper, how are you going to pay for the repairs? Can you get an FHA 203K loan? a construction loan? private or hard money lender? Will you have enough money to cover unexpected costs?

    If you haven't yet, try to find a local group of investors. You'll be able to get a lot of great info from investors that know your local market. 

    1Reply
  • Mateo Oquendo-Chandler
    Investor · Amelia, OH · Member since 2022 · 58 posts · 45 votes
    3y
    Quote from @Michael Paling:

    Congrats on getting your debt all paid off. That's a great foundation. If all you have right now is $8K, then I would suggest trying to get out of that expensive vacation. Is going on this vacation worth setting your future back by a year? Your family should be supportive if you explain your situation. Maybe there's an alternative vacation that's much cheaper for your family. 

    It really sounds like you might want to build up your financial position a little more. If you're planning on buying a fixer upper, how are you going to pay for the repairs? Can you get an FHA 203K loan? a construction loan? private or hard money lender? Will you have enough money to cover unexpected costs?

    If you haven't yet, try to find a local group of investors. You'll be able to get a lot of great info from investors that know your local market. 


    I agree. Real estate is a great investment to get into but if you throw everything you have left then you would be doing the opposite of supporting your family. All good things take time and preparation. If you truly want to get involved in Real Estate than I would start with your most important asset, your income. Look into ways to increase your income. While you work on that, invest in your education and improving your network. The more people you know, the more stories you'll hear, which will help you to determine the best course of action when it's time for you to pull the trigger. In the BP podcast they are always talking about adding value. Even without money, you can still add value to other investors and be involved. This could be done through attending meet-ups or helping other local investors with finding property or working on their property along side them.
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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    3y

    Congrats on paying off your debt.  I agree with the others that $8K is not enough to get started especially if you are buying something that needs work.  If you are not living in it, you will need 20% for a down payment.  You will also need money to fix it up-even if it is as simple as paint and a few small things it does add up.

    It is unfortunate that your family isn't supportive especially if the vacation will set you back a year.

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  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    3y

    When you say family roped you into the vacation.   Your wife or your side of the family?  

    If your side of the family then that’s on you.

    If your wife, then you need to develop a real estate plan that both of you can agree to.  

    Although you paid your debt down, going on this vacation says the issue or actions to succeed have not changed.  Don’t get into real estate until you have your personal financials and more importantly your spending under control.  

    The house you describe could be a great investment.  A 3/1 could be made into a 3/2 and will become more valuable.

    School districts matter.  Which one is better from a marketing standpoint?  

    Look at the people around you.  In 20 years do you want to be like them financially for your family?  If you’re going to get into real estate investing start interacting with people that go that way.  Other people will lead you astray or tell you why you will fail.

    It might seem you are starting off small, but that is good.   Learn real estate on a small scale.  Make your failures early on. Then your wealth will start to snow ball.  

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