Am I moving too fast?
I have been renting out my home to extended family for the past 2 years making ALL the mistakes 1st time landlords usually make.
I've kicked them out and am in the process of cleaning up the damage they've caused and renting it out to someone new.
I've been thinking of buying more rental properties seeing as how I feel I can handle it.
I recently found a deal on craigslist in my area...if I had to give it a grade...I'd give it a D. I personally wouldn't live there but I dont like row homes and it's on a 1 way street...plus the schools aren't great and it has a bad reputation.
However it's a prime area for Section 8. Which is why I'm interested.
My (partner) however thinks I should just focus on my property and "wait" before doing anymore deals.
I understand what hes saying but at the same time...its a FSBO so I could probably get SELLER FINANCING. Which would make the deal hard to just walk away from.
I can afford to buy the property but now arent sure if I should or not. I wouldn't want this to cause a problem between us.
Am I moving too fast? Should I focus on just my property? What would you do?
I may get a look at the property today and that could help with my decision...just want other opinions from seasoned and new investors.
#5 All Forums Contributor
- Plymouth, MI
Speed isn't the issue here. Speed is a good thing...in moderation.
The issue here is you haven't posted any numbers. You buy rentals based on the numbers.
"The house being on a 1 way street"..and "the schools aren't great", really don't matter.
When you say, "...it has a bad reputation...", what's the "it" you are referring to?
Also, just because it's a FSBO, doesn't mean it's going to be open for seller financing. If you said the property had no debt on it, I would agree, but you haven't mentioned what the current seller's debt situation is. You also haven't mentioned what the cash flow would be. That's what you should be focused on first, last, and in the middle.
It doesn't sound like you have any experience with the things you talked about. That's a risky plan. Have you ran any numbers? Real Estate investing is about the NUMBERS! Getting a seller financed deal is much harder than you think.
I'm just being blunt and haven't had my coffee.
#2 Medium-Term Rentals Contributor
- Lender
- Youngstown, OH
Seconding @Joe Villeneuve. I don't think speed is an issue at all. You've been a landlord for 2 years. But it sounds like your current tenants gave you a lot of headaches. A D-property is going to give you more headaches. So why go in that direction?
Starting out investing you need to learn a lot. The more difficult the situation is the more difficult it will be for you to learn from it and make some money at the same time. You may learn a lot from a difficult situation but that usually comes from losing a bunch of money in the process. The safer and more practical strategy would be to find something that is easier to manage so you can find your legs. You've probably already learned your lesson about renting to family or friends; there are many more to learn that you won't see coming so being more conservative can help ensure your success by allowing for more margin for error.
@Nicole Heasley I was thinking the same thing recently. And with finding a new tenant for my property with the people I'm getting because of the area. It is like a D area...the next towns over are better(better schools, better communities) but higher home costs and taxes.
Although that's to be expected in a better area
#3 Managing Your Property Contributor
In a given market, the less expensive the house, the higher the risk. Yes you may cash flow higher, but you will have lower quality tenants and more headaches. I'd rather get a starter or 'standard' home in a good area and a good tenant.