Looking to buy first rental property cash at 22

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Looking to buy first rental property cash at 22

Alexander Schnidt
Member since 2018 · 4 posts · 0 votes

Hello, 

My name Is Alex I'm 22 and have recently sold a home I inherited and am looking to buy a rental property. I'm buying cash and my main goal is making as much monthly profit as possible. But also want something that will appreciate while renting it out. I have a background in construction and am able to fix my own property to an extent. I'm also interested in flipping and alsi buy and hold properties. I have experience being a landlord renting out the home I'm currently selling. I'm looking In Orlando and other Florida cities. Also in Houston, San Antonio and other Texas citys. I'm interested In some less hot, but high rent markets like Chicago and some New Jersey Cities. Im looking everywhere for the best deal and am looking at all possible investments. SFH, MFH, condos, townhouses. Any help or advice is appreciated. I don't know much about the markets I'm looking at.

Thank You,

Alex Schmidt

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Peter Ledger
Investor · Salt Lake City, UT · Member since 2018 · 63 posts · 45 votes
8y

@Alexander Schnidt There's a lot of differing opinions out there on what and where is best. What your first step should probably be is define the WHAT, and that can lead you to Where you should probably do it.

If you want to flip, what kind of flips? High end or low entry? If you want to rent, what is more important to you: cashflow or appreciation?

What I can say is that if I were 22 and had your resources, I would look into house hacking. Find a quad that needs some work, buy it with cash, rehab it, live in one of the units, rent out the others, refinance to get your cash back(with a home loan since you live there. The other rents will cover your mortgage), then move on to the next one.

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  • Bryce Harrell
    Gainesville, FL · Member since 2018 · 16 posts · 4 votes
    8y

    Hey Alex, I'm also in Florida. I'm not so keen on Orlando and am in one of the overheating markets of Gainesville. Ultimately I am wishing you luck in finding your deal!

    0Reply
  • Peter Ledger
    Investor · Salt Lake City, UT · Member since 2018 · 63 posts · 45 votes
    8y

    @Alexander Schnidt There's a lot of differing opinions out there on what and where is best. What your first step should probably be is define the WHAT, and that can lead you to Where you should probably do it.

    If you want to flip, what kind of flips? High end or low entry? If you want to rent, what is more important to you: cashflow or appreciation?

    What I can say is that if I were 22 and had your resources, I would look into house hacking. Find a quad that needs some work, buy it with cash, rehab it, live in one of the units, rent out the others, refinance to get your cash back(with a home loan since you live there. The other rents will cover your mortgage), then move on to the next one.

    2Reply
  • Alexander Schnidt
    OP
    Member since 2018 · 4 posts · 0 votes
    8y

    Thanks for the advice Peter I appreciate it. I will definitely do some soul searching and figure out whats most important to me. I'd be interested in house hacking In the future but couldn't currently due to housing commitments. I got options, and think I should take some time before making any decisions

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  • David Baier
    Rental Property Investor · Orlando, FL · Member since 2018 · 545 posts · 386 votes
    8y

    Alex if you have any specific questions about the Orlando market PM me. There are a lot of surrounding areas right outside of Orlando that could also make sense depending on what you are looking for. 

    1Reply
  • Troy Williams
    Rental Property Investor · Florida & Shanghai · Member since 2017 · 192 posts · 68 votes
    8y

    @Alexander Schnidt  interesting coincidence we are looking at similar markets and so far they are still showing good potential if you look hard.   If you are open to partnerships, let's stay in touch!

    0Reply
  • Judy Parker
    Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
    8y

    @Alexander Schnidt - BEFORE you make a hasty decision selling the property you inherited, you may want to consider doing a 1031 Exchange, to save yourself a huge tax hit. As per the tax code, there is a 180 day timeline, however it is well worth it. See @Kyle Kadish of Advantage Wealth Solutions or @Dave Foster here on Bigger Pockets.

    1Reply
  • Alexander Schnidt
    OP
    Member since 2018 · 4 posts · 0 votes
    8y

    already sold judy

    0Reply
  • David Campbell
    Investor · San Diego, CA · Member since 2017 · 190 posts · 117 votes
    8y

    @Alexander Schnidt Focus is key. See what area of real estate you really want to delve into, then go full bore. You're off to a good start now learn learn learn!

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  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    8y

    @Judy Parker, thanks for the shout out.  @Alexander Schnidt, Since you've already sold the 1031 isn't an option as your intermediary must be in place prior to the closing of the sale.  But, depending on when you inherited that property you may not have much built up gain if any because the basis of the house is "stepped up" when you inherit it.  So when you inherit it you get it as if you paid market value for it.  that lets you sell immediately and not have any tax.

    It's also one of the greatest last gifts you can give to your heirs.  

    The 1031 Investor5140 Reviews
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  • Alexander Schnidt
    OP
    Member since 2018 · 4 posts · 0 votes
    8y

    Anything under 250k is untaxed

    0Reply
  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    8y

    @Alexander Schnidt, I think the $250K you're talking about is the primary residence exclusion under sec 121.  Re-reading your OP has me wondering if you've lived in the house for two years.  In that event two things would happen.  

    First, there would have been some appreciation from the inherited basis so there would be some tax liability.  

    Second though, you would qualify for that $250K of sec 121.  So as long as the property has not appreciated more than $250K since you inherited it you would get out of the sale tax free.    Good news!  

    The 1031 Investor5140 Reviews
    WebsiteView Page
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