Lost my job, what should I do?
Hello all, first-time poster on bigger pockets. Sorry in advanced if it's a long complicated post!
I'd been listening to the podcast for about 4 months or so, even started getting prequalified for a mortgage but never pulled the trigger. I recently lost my job a month ago and have been thinking of buying some real estate properties to rent out. I am somewhat familiar with my area (Broward County, Florida) and own one rental property with my parents that we bought with cash in 2010 and split the rental income 33 (me)/66. I also invest in securities where most of my assets are tied up, but I am looking to move into real estate as I think stocks are nearer their peak than real estate in my area. My situation is this:
I have about $150k in assets broken down by $50k in cash, $20k in a 401k, $50k in Roth retirement accounts (can be pulled out without penalty but would prefer to avoid losing tax advantage), and $30k in liquid securities.
My side gig, now my main gig, now makes me about $3k a month tutoring. However, most of that income is offset by expenses to reduce taxes. I am currently in the process of filing my 2015 tax return (extension) where I can remove those expenses to increase that year's self-employment income, but that income would be taxed at the 28% bracket so not sure if it's worth it.
I have no debt (car paid off, no credit card debt, no student loan debt) and pay no mortgage on my current home, so the $3k is unburdened cash.
My credit score is in the 780s.
Because of my loss of W-2 income, I doubt my self-employment income from my 2014 and 2015 tax returns will paint me in a good light (since it was side work, I think my 2014 tax returns says gross was about $10k for the year).
Are there ways to get lending that will consider the rental property itself as an investment? If so, how and is that a good idea?
Would it be better to buy properties with cash outright? I am a little wary of burning all of my capital and would prefer to leverage it if I could.
Should I try to find equity partners?
Should I sit out of the RE market, hope I don't burn through my capital, waiting for the next downturn and set of opportunities then?
Any advice would be great. Thanks!