Rental property

10 Replies

Hello, my name is Anthony and I'm 25. I bought my first home when I was 22. I'm looking to sell my home in the next few months hoping to make some money off of it to start investing in my first rental property. I'm looking to take the money I make and go to and auction and hopefully fine something that i can pay cash for to have positive cash flow when I start renting it out. I am new to this and I know this isn't a get rich over night. This is what I want to do I find myself having butterfly's in my stomach every time I research and think about it.

@Anthony Snyder , welcome to BP!

It sounds like you already have a plan which is always good. The next thing I would do is to write down all the numbers and see if they make sense. 

If you sell your house, how much you will get in proceeds? Will the proceeds be sufficient to purchase on auction? If not, do you have other source of funds? What price ranges should you be targeting on auction? How much can your target properties rent for? 

I think there is quite a bit of home work to do. Search around BP and ask questions. You will be tankful if you do it.

Originally posted by @Yinan Q. :

@Anthony Snyder, welcome to BP!

It sounds like you already have a plan which is always good. The next thing I would do is to write down all the numbers and see if they make sense. 

If you sell your house, how much you will get in proceeds? Will the proceeds be sufficient to purchase on auction? If not, do you have other source of funds? What price ranges should you be targeting on auction? How much can your target properties rent for? 

I think there is quite a bit of home work to do. Search around BP and ask questions. You will be tankful if you do it.

 Thanks Yinan, 

 Im looking to invest from any where to 20,000- 40,000 at an auction sell. The areas im looking into are averaging around $800 month in rent. some of the houses starting bids are going for  20,000.

If you do not have repairs above the 40,000, you will make money on the property. i have put in an offer for a property that would rent for $800 a month, it needs 25,000 in repairs, after figuring my costs to hold the property i figured i could make about 200 per month if i kept the total price under $50,000. just make sure you know what your expenses will be and set yourself a limit, try not to get caught up in the excitement of bidding and go over what will make you money. better to walk away with money still in your pocket then to owe more than you can make.

Originally posted by @Patrick Liska :

If you do not have repairs above the 40,000, you will make money on the property. i have put in an offer for a property that would rent for $800 a month, it needs 25,000 in repairs, after figuring my costs to hold the property i figured i could make about 200 per month if i kept the total price under $50,000. just make sure you know what your expenses will be and set yourself a limit, try not to get caught up in the excitement of bidding and go over what will make you money. better to walk away with money still in your pocket then to owe more than you can make.

 Do you own any apartments? I'm also looking at purchasing a house in the downtown area in Franklin and dividing them up in units. 

Let's say I purchase a house at 80,000 and divide it up into 4 units and I rent them out at 575 a month that's 27,000 a year versus on buying 1 house and just renting the whole house  out for 800. I'm not understanding why most investors don't start out this way?

Anthony, first you have to see if the area the house is in is zoned for such building, some zoning laws only allow for a single family home. I have three houses, working on my fourth right now, one is a two family that i rent to families, and then i have one single family and one i was able to go before the zoning board and turn to a two family that i rent to college students, where i rent by the room. you need to ask the zoning department if you would be able to divide the house like you want, before you buy it with the thinking you can. 

Originally posted by @Patrick Liska :

Anthony, first you have to see if the area the house is in is zoned for such building, some zoning laws only allow for a single family home. I have three houses, working on my fourth right now, one is a two family that i rent to families, and then i have one single family and one i was able to go before the zoning board and turn to a two family that i rent to college students, where i rent by the room. you need to ask the zoning department if you would be able to divide the house like you want, before you buy it with the thinking you can. 

 Thanks that helps out a lot. I would have been clueless on who to talk to about the zoning laws. 

@Anthony Snyder .

If you have a house that you are planning on selling to ave money to invest, then I'm assuming you have some sort of equity in the house. Can you not refinance the house and pull out the equity to use for investing? Or try and get a HELOC?

Originally posted by @Simon Shih :

@Anthony Snyder.

If you have a house that you are planning on selling to ave money to invest, then I'm assuming you have some sort of equity in the house. Can you not refinance the house and pull out the equity to use for investing? Or try and get a HELOC?

 I'm trying to avoid any loans as much as possible. 

I bought my house on a very good deal, lake front property 2 bedrooms 1.5 bath added a bedroom now sits 3 bedrooms. I bought it when I was 21 I am now 25. I am not trying to keep it nor do I want to rent it out. I'm hoping to profit atleast 50,000 and turn around and take that money and invest in some rental property's without having to take or borrow any loans.