This past March I purchased a lot in Gainesville Florida for 12k it was listed for 18k and have been in the process of demolition the house on the property that is too far gone for renovations. I currently have 12k in debt on my car, 10k of debt in student loans, and owe about 6k on a personal Loan that I used to pay cash for the property. I’ve been in contact with a engineering firm designing a home and plan on getting an owner builder permit to start building. I want to spend about 30-50k to build the 2 bedroom 2 bath, live in it for a year then rent it out. I’d be going further into debt to build the house but both my car loan and personal loan will be significantly less within a year. Does this sound like I’m getting too far into debt or could this just be the start to building a nice sum of equity that will help me buy a turn key ready property in the future ?
@Robert Henry Esford there is good debt and bad debt. Car loans and credit cars are bad debt. Income producing debt is something entirely different. The question comes down to not is it too much debt but rather, is it a solid investment. You'll need to decide that. One thing I would look hard at is whether 2 berdoom homes are a good investment in your market and the the neighborhood that you are considering. Are 2 bedrooms the norm there or would that make your property an anomaly?
@Mike D'Arrigo thanks for the information as far as different debt goes. I think this investment would be a good form of debt considering I can cut a lot of cost by having friends and family who are professionals in their field help me with the building process and so forth. Most of the homes in the neighborhood are 3 bed 2 baths but they are mostly manufactured homes or trailers. There are however a few 2 bedroom 2 baths. Would it being an anomaly be a bad thing ?
@Robert Henry Esford being an anomaly is not usually a good thing unless in being so, it is adding value over the other properties in the areas. a 2br house in an area that is primarily 3 bedrrooms is not usually a positive. I'd also be real careful of building where there are mostly manufactured homes or trailers.
@Mike D'Arrigo awesome ! Thanks for the insight! I really appreciate it !