I am trying to get some feedback. I have been doing a lot of reading and listening to podcasts on rental property. I wanted to get some open feedback.
I am looking to purchase my first condo to turn into a rental property. I am doing a house hacking process where I am getting a loan Thru primary resident and placing 25% Down payment. I plan on putting tenants in immediately as I live in my travel trailer. My cost of living is fairly low.
I ran the calculator on bigger pockets and have a 5% cash flow. I plan on placing payments on the principle of the loan monthly for the first year and have enough income to pay the loan off in 2 years. I am not touching 60% of the money for the rental as that is operating expense and that will stay in reserve for vacancy and cap expense.
My goal is to pay the property off in 2 years or very close to that then purchase another property and place tenants in there as well and have the tenants from the first property pay on the second and I too will place funds on the principle. Trying to do a debt snowball process. I am looking to do long term but and hold as I want to focus on getting 5 property with 75% paid with no loan balance in 8 years.
I was just hoping to get some feedback on my process. Anything would be greatly appreciated. Thanks for reading and responding. Have a great day. Happy investing.
I invested in condos and looked into coops. Be careful of the HOA and bylaws. Some folks bought condos thinking they could rent it out, and lo and behold told they can't.
One condo complex I invested in approved the unit as a rental. but over the years, develop rules that they get to approve tenants and leases. I bought it at a market low, sold at the market high and got rid of it.
Hi @Jeffrey Bass ,
I like the aggressive principal paydowns. This is something I do as well. I like to pay one down every two years and take one year saving the next 25% down. I also like that even though you are doing owner occupied, you are still doing a large down payment. I hear a lot of people say go owner occupied to get in for 3.5% down. This would make getting any kind of cash flow hard to get.
My only concern with how you are doing this is the HOA. Like @Frank Chin said. Be careful.
Not only can there be rules that make renting hard, living in the RV can be a problem as well. I would make sure there is nothing stopping this and be ready for the rules to change if the assoc doesn't like thee trailer being there. I am also concerned with random assessments that HOA's can have come up. You really have no control on those.
@Frank Chin thanks for the info. Currently the condo I am purchasing allows me to rent. Also HOA are low now, however understand they can increase.