This house took me about ten years to do mostly due to bad credit, a deal three years ago falling apart a week before closing, and analysis paralysis. Thanks to BiggerPockets I’ve got passed all that and finally purchased a 1 bed with loft and 1 bath. A few more painting touchups and the house will be ready to rent.
Just doing this one investment and I am hooked. I loved every bit from finding it to now doing fix up work and getting it rented. I am a buy and hold investor with a goal of ten doors in the next 5 years but want more than that, ya know “Massive Action”, 10X By Grant Cardone. I am already thinking I should lower the bar though. After all how can obtain this goal with only ten thousand a year that I save up?
Here’s where I need could really use some help. Now What, I don’t have enough to purchase a second home. Should I pay the house down with the ten thousand a year saving? I surely do not want to take as long to purchase another house as I did this one. Maybe I should sell for just under the apprised price and start over or save up to purchase the next one. Please let me know if I have for got any details below and I look forward to your advise. Thank You.
25% down $24,500
Per month $ 700
I would refinance and if that is not a possibility start looking into creative financing. Where there is a will there is a way
Stephen, Thanks for the input, this will help. After seeing your message which got me thinking, I will go to the local meetings and start talking to some people. Thank you.
Hi @Brian Grant , with today's low interest rates you might get more for your money by saving for another down payment rather than just paying down the loan you have. Also for your next deal you might consider house hacking and using an FHA loan so that you don't have to save up as much. Not sure where you are investing but Lake Arrowhead and Big Bear might work well for Air BnB as well. Let me know if you would like to discuss further.
Hey Brian, if you're looking to grow quicker I would focus on finding partnering up with someone who has the money and wants a passive investment. This would allow you to purchase several more properties without needing to save the money yourself.
A house that's worth 120 should rent for more than 700. If that's all the market will hold in your area it's probably not a good market to invest in for rental property. You're barely collecting 1/2% per month in rent. On paper if you added up your expenses it sounds like a loss - before you move on, what can you do to maximize rent collection on this unit?
@JD Martin That is actually one of the cheapest properties you can get in Southern California, most are more than double that, its not really out of bounds out here. It may not provide the immediate rental returns that other cities do but may provide more rent growth, appreciation, and due to it being a mountain community, may provide Air BnB opportunities, especially in winter.
Hey @Brian Grant
Congrats on the property! I would look at how you can best utilize that asset to continue growing your portfolio.
Please feel free to reach out if there is ever anything I can help with!
Thank you all for all the great advice. I am currently looking at the Airbnb option but am leaning towards the long term rental option for the tax advantages. As I look into my future I will aim for the middle to end of next year saving up and refinancing which should position me nicely for another investment. Again thank you all for the great advice and helping to bring clarity to the path.
@Brian Grant Congratulations!
Don't give the bank your money by "paying it down". You may be able to have them give you money when you refinance in a year or two.
And be selective in your rehabs if you want to rehab your single family rental. Remember that single family homes and smaller multi's are appraised based on comps - and comps don't take into considerations the capital expenditures you put into the home. My recommendation to you is to look at similar houses sold within the past 6 months and see how they look and appraised.