I have a crazy idea, do you think it's right?

Question

Michaela G. · Answer

@Brittany Fife , I'm a big picture person, so, I don't get so easily hung up on the details at first.

What you're proposing is that you're willing to make sacrifices to become a real estate investor, by living in very reduced space. That's an excellent idea and worth exploring.

So, if you own this single family home that needs work and you have a credit line on it - what keeps you from maybe reducing your living space to one room, while you renovate the rest of the house? It would give you similar space, but more comfort, because you have a bathroom. You can put most of your furniture into storage and have empty rooms. That would also keep you from the expense of having to buy a camper.

Right now all of my furniture and things are in storage in California, while I'm living in a rehab in Atlanta. Everytime I do that it reminds me that I don't really need all of those creature comforts, like tv or sofa etc. And it keeps my feet on the ground.

Once the house is renovated, you might want to consider selling to get your funds back out or maybe refinancing. Otherwise your creditline is tied up in a rental house and you might not have any funds to keep going.

Tom V. · Answer

Sounds like a plan. If you're willing to make those sacrifices now for long term gain, you'll win in the end. If you can reduce your living expenses to practically nothing, you can make large gains in wealth building. Most people will tell you that's crazy, but then again, most people are living paycheck to paycheck. Don't take advice from broke people. I say go for it.

Colleen F. · Answer

If you really are in new Hampshire and intend to stay there think winter....  You will need to winterize or heat the house you are working on because pipes can freeze and you are living in a trailer which will also need some heat.  (I would join the Y or a fitness club for showering that was what we did when the well went ).    A more workable solution is to live in the rehab, rent it then live in the foreclosure then rent it.

I lived in a camper waiting for rehab to be done two weeks then a hotel for a couple days. I won't say its not doable but  it has its challenges. You are not off-grid because for phone and cooking you need electric.  If you are in a neighborhood people will sometimes question it (and dont forget you have to get the holding tank emptied some time.) It would be easier if it is just you (I had small kids at the time) but it definitely won' t be so easy in winter.

Bryan O. · Answer

@Brittany Fife you need to first decide what you think "off the grid" means. If you think you can manage rentals with no contact information, it's a bad idea, but it looks like you are more likely going to use a "spare" house from your family. You still have an address, phone, etc. Also, if you are planning to renovate another unit, where do you put your tools? Do you buy them, leave them in the property, then sell them?

The concept of off the grid is fine, but it doesn't sound like you have any idea of how that might happen. You would need good management in place with very well defined action plans while you are unavailable. And then you have a large target painted on you to have your manager stealing and claiming repairs.

I recently had a tenant buy a small pop-up trailer. They loved it so much they broke lease and decided they would live in it and drive around the US for the next bunch of years. No idea where they are now. Cool plan, but without knowing how to execute it will cause you to fail.

Best of luck.

Janette Reidhead · Answer

LOL!  I more than agree!  It's crazy! Good luck to you pal!

Joe Villeneuve · Answer

I don't see a plan.  I see the makings of an "idea (?)".  I see no actual numbers.  As I think about this "idea", I can't help but wonder when you put actual numbers in place, that you'll see it is full of holes.

First, where do you park this camper?...and how far is it from your shower?What is this heat source you speak of?  Being off the grid, are you using electricity (remember, you need to be able to plug something into some power source)?  Campfire?

Second, Is this equity line in place already, or will you be applying for it ...with no address of record?  Are you sure the equity line in question will be enough for the rehab (and what if it isn't)?  I don't see any numbers for rehab estimate, or Equity Line.

Third, do you know what the rent will be when you do end up renting your existing property?  Will it cover your Equity Line payments, taxes, insurance (this is now a non-owner occupied property), and other misc. costs?

Fourth, how much will this auction/foreclosure property cost you, and what funds are you planning on using for it...to buy and rehab?  Work on it in your spare time?  How much spare time do you have, and how long will it take to do the rehab?  More important, what is your threshold of pain living in the camper (or substitute)?

I'm not trying to be critical, but you really need to think this through using actual numbers ($$$$$ and "days" "months" make that "years").

Thomas S. · Answer

It is a plan, a bad one.

It sounds like you can not afford to be a investor. If this is the only way you can invest then you can not be a investor. Your tenants will hate having you as their landlord.

Bill Schrimpf · Answer

Did you take property management into account with your numbers?  It would be difficult to be 'off the grid' and be a proper landlord.

If you can make the numbers work, and others are cool with you using their showers for years, and your OK with the lifestyle, go for it.

Maybe consider an RV with a shower and commode...

Derrick W. · Answer

sell your house and buy a duplex. Rent out one side and live "free" in the other.

Joe Villeneuve · Answer

Why?

I have a crazy idea, do you think it's right?

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