Need Advice
Okay, so I bought my first home a year ago. I live in it and rent it out to some friends as well, make about $400 a month cash flow. I have a decent job and business on the side for additional income.
I'm getting ready to purchase my first investment property. My original plan because of the market we're in was: purchase a foreclosure that needs some work, fix it up, get a tennant in at hopefully $500-$600 monthly postitive cash flow. Hold the property for 3-5 years along with my personal residence until the market has come around, and sell my properties.
I know you can potentially make a higher return on investment if you can flip the house, but my concern is that the house will stay vacant for far too long (because it's competing with all the under priced forclosures) and it will eat up a lot of my potential profit in holding costs.
What about buying a foreclosure, fixing, getting a tennant in, and then marketing the property to investors. This way, I guarantee myself cash flow if I can't sell right away, and at the same time I can maximize my return on investment by potentially selling the property for $20,000+ profit.
Advice? I'm looking to learn as much as I can before I buy.