My family and I live in a home in a great neighborhood. The house (which is in my wife's name) is valued at approx $230,000. We purchased it 15 years ago for $80,000 and owe about fifty. We are now looking to move, but want to rent our existing house and possibly buy another rental i.e the BRRRR. Any advice on how to proceed?
Find out what the rental market rates are for a similar property. You will need to get in the range of $2000 - $2400 per month to justify renting. I addition you should be refinancing to pull out the dead equity otherwise all you will be doing is buying artificial cash flow with your own money. The property itself will be producing no profit. You have far to much equity in the property which turns it into a high risk liability.
$150K in equity will require a $1250 (10%) return of the top of your rental income before any other expenses. No way you can achieve any significant positive cash flow with that much dead equity.
There's really no way for anyone here to thoroughly answer that question without you giving us more info. Answers will be much different depending on what your goals and criteria are as an investor. What are rents in the neighborhood like? Do you have aspirations to grow as an investor or are you only exploring the idea because of this one opportunity? What is your investment criteria- CoC? Cash flow? appreciation? Anyone can tell you that you need to make X dollars or charge X rent, but your goals and situation are different than anyone else's.
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