Updated almost 6 years ago on . Most recent reply
A path forward - when to begin my real estate journey
I live in southwest Louisiana and my full-time permanent employer provides a very nice 3 bedroom 2.5 bath home for my family to live in, rent, utility, and maintenance free. Unfortunately the educational opportunities near by are poor and we are planning to move to Lake Charles when my son starts school in about 6 years. We are currently saving $2,000 a month for a down payment on a home. We currently do not own any real estate and this would be our first time buying. Below I propose a number of scenarios, I"m interested in opinions from others. Thanks! I'm extremely new and just beginning to learn so bear with me through this. If you have other ideas I'm all ears!
1. We save $2,000/month for 6 years, $144,000.00. We buy a primary residence and then begin looking at rental properties.
2a. We save$25,000 during year 1. Find a great deal on a rental property for <$125,000. Hold that property for a years and years to come because it will be cash flowing.
3. We save $25,000 during year 1. Find a great deal on a rental property for <$125,000. Hold that property for 5 years and then sell the property and use the equity and savings towards the down payment on a primary residence. During that 5 year period we would also be save $120,000 which could also go towards the purchase of our primary residence. We would then based on our experience consider saving for and purchasing additional rental properties.
4. We save $2,000/month during year 1. Find a great deal on a rental property for <$125,000. During year 2 we would save another $25,000 and purchase another rental property at the end of the year or beginning of year 3. We would then use year 4,5,6 to save for a down payment on a $250-$300k home.