Getting started with my first investment

3 Replies

Good morning,  I’ve been wanting to get into real estate for awhile now and am looking for some advice.  Here’s my personal situation.

I’m 38 years old, good job, family, house.  My credit is....ok. Depending on which agency is reporting between 640-670.  I also own 8 acres of vacant land I acquired via family/town.  It had belonged to family who got it via gifting from their mother, my grandmother.  They are out of state and never paid taxes on it.  I got deeds drawn giving me their interests in the property and worked with the town to get the property as it had already been foreclosed on for the total of the back taxes.  I’ve just sat on this land for a few years now. 

Should I sell the land and pay off more debt and free up what I would estimate to be an additional 600-1000 a month of my earned income or try to invest it in acquiring a property and get myself into the game?  Having never had an investment property before I’m a little lost as to where I should start.  Ultimately I would like to retire on rental income.  What are everyone’s thoughts? Thank you in advance for taking the time to read and respond.

@Nick Koenig have you thought about house hacking a 2-4 unit? You can put 5% down, live in one unit and rent out the others. Ideally the rents cover most/all of the expenses which lower your cost of living thus accelerating your debt payoff. Not sure if this would fly with the wife though. Hasn't worked on mine yet, but then again we have 4 kids still living at home 😆 You could then turn your current house into a rental. 

@Nick Koenig I would need a lot more info to give any guidance on your situation. Happy to talk sometime if you want. There are lots of BP folks that would encourage you to invest even while having debt (car loans, cc, student loans, etc.) if you can get a higher return than you are currently paying in interest on your debt. Personally, I’m not one of them. Investing isn’t simply about numbers, it’s about understanding the risk that accompanies debt. In my opinion when one invests while having consumer debt it greatly magnifies the risk. So in general, I’m not a fan of taking on added risk (investing) until/unless you have a solid financial foundation because investing is a long term proposition that requires cash/liquidity. The stronger your financial base is before investing, the less risk you expose yourself to once investing and the greater likelihood for success. Remember Toys R Us? They went bankrupt. The reason? Too much debt.