Starting out... should I flip or rent?
Hello, everyone.
I have been watching BP videos for awhile and I finally decided to get started. However, like many other newbies, I have a bunch of questions. Can someone offer some advice here?
I live in a small townhome in Buena Park, CA and I need to (or I should say my wife needs to) move to a bigger home within 2 years. I have 40,000 in cash and 120,000 in equity line of credit.
1. Will getting a rental property with 30 years amortization negatively impact my ability to purchase a bigger home in near future (ie: income-debt ratio)?
2. I feel nervous about buying rental property out of state (or far away from me) because I can't see it. On the other hand, Southern California properties are too expensive for me to buy and rent out. Should I not worry too much about the distance and just trust property management company?
3. I think I have a good rental property in Barstow, CA but I think it is not a good place to buy a rental property. (Cash on Cash ROI: 19%, Purchase Cap: 10%, Month Cash Flow: $240). Barstow has high vacancy rate and it is a small town. Also, the population is not growing. Can any experienced people offer some advice here?
4. Can you flip out of state houses? It seems super risky because I don't know the area and I wouldn't be able to oversee the project.
I feel like I worry too much without taking action. All the actions I have been taking are basically looking at properties every night. Thank you for your advice.