New Landlord - Planning Ahead for Future Investments

5 Replies

Hi everyone, this is my first post here and I hope to become a long time member. 

I recently purchased my first home and I am renting out the basement to a friend.  This has been ongoing for about 6 months.  I do have a mortgage on my current property.  

I would like to get an idea of the strategy I should start incorporating into my goals.  For the past 6 months, I have been using the extra rent money to fix up my current home and install any improvements / upgrades.  Fences, Doors, Windows, etc. 

I am charging $750 a month in rent without utilities (it is a friend) and I am getting to the point where I do not need to purchase anything for the home and I can start saving the cash.  

I would like to be able to purchase a second property (2-family) that I can rent out 100% in the future.

Currently my plan is to save the money from rent + my income in order to obtain another $50,000 for a down payment / closing fee.  

I plan on putting this income into a savings account / CD, in which I can take out an FHA loan for the second rental property at the right time.

This sounds pretty simple, and basic but I wanted to run it by on the forum for some of the veterans here to dissect and maybe give me some new ideas or strategy. 

If anyone has a book they can recommend (many to choose from!) that would also be appreciated. 


Thanks!

I dont think you can buy a property as a rental under the FHA plan. Someone else may be able to confirm or correct me on this one. When buying investment property using bank financing it has to be minimum 200% down payment + closing cost. The FHA financing is the 3.5% down payment that is typical for first time home buyers. If you get caught renting out a home you purchased under FHA guidelines you could get in trouble, not sure what they do but its not good.

Curt Davis, Real Estate Agent in TN (#00321765)

Ok, I can look into the loan options for rental properties. 

However, in regards to the rest of my strategy - What is your opinions?  Anything I can improve? 


Any recommendations on a book for landlord/real estate investing for more insight? 


Thanks

Originally posted by @Anthony Li:

Hi everyone, this is my first post here and I hope to become a long time member. 

I recently purchased my first home and I am renting out the basement to a friend.  This has been ongoing for about 6 months.  I do have a mortgage on my current property.  

I would like to get an idea of the strategy I should start incorporating into my goals.  For the past 6 months, I have been using the extra rent money to fix up my current home and install any improvements / upgrades.  Fences, Doors, Windows, etc. 

I am charging $750 a month in rent without utilities (it is a friend) and I am getting to the point where I do not need to purchase anything for the home and I can start saving the cash.  

I would like to be able to purchase a second property (2-family) that I can rent out 100% in the future.

Currently my plan is to save the money from rent + my income in order to obtain another $50,000 for a down payment / closing fee.  

I plan on putting this income into a savings account / CD, in which I can take out an FHA loan for the second rental property at the right time.

This sounds pretty simple, and basic but I wanted to run it by on the forum for some of the veterans here to dissect and maybe give me some new ideas or strategy. 

If anyone has a book they can recommend (many to choose from!) that would also be appreciated. 


Thanks!

 I think you have a great plan!! It's simple and straight forward. Do not complicate your plan any more than it needs to be. Keep it simple and stay focused on your goal.

One of my fav books is Millionaire RE Investor. I think it's by Gary Keller.

Best wishes for your future success.

Look into creative financing. Look for sellers willing to sell on land contract or other forms of seller financing. Look into some of my older posts on how Ive bought nearly a million dollars worth of small multi-units for very little out of pocket. With $50k cash in my market or one slightly bigger Id like to think I could do $1.5-2 million worth of deals!

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