Hello BiggerPockets Community!
Looking for some advice from you guys regarding an issue that I'm having.
I was recently laid off from my job - which totally sucks, especially during the holidays - but I'm staying positive and framing this as a potential opportunity to start out in Real Estate. Obviously getting a job is my top priority at the moment, but it being the holiday season I can't imagine there are a lot of companies looking to hire. I can go about 3 months before things start to get a little tight, so I'm hoping to have something in place employment-wise by the end of Q1 2018. That brings me here to reach out for some advice because I do have a few options for the property that I own.
Background - I bought by first home back in 2013 (house was built in 2013 as well) for $265k and I just had it appraised for around $450k in the Reno, NV area. Here is what I'm thinking:
1.) Sell it and use $40k for living expenses (while still looking for employment) and then $150k to either buy and hold or flip depending on which one makes sense for that particular property and location.
2.) Rent it out - my mortgage payment is about $1k, and I can rent it out for about $2200 based on the property size and area where I live.
3.) Wait to do anything until I get a job and then take out a home equity loan and start investing from there.
I know that people say that you shouldn't use your first home as an investment vehicle, and I've heard from many real estate agents and investors to hold on to the house if I can because they think home values will continue to increase in my market. Tesla, Google, Amazon, Switch and Panasonic have all moved into the area in the last 5 years and supply is tight for homes. On one hand, I know it makes sense to wait until I'm employed, but on the other hand I kind of want to use my house to get into the real estate investing game because it's always what I've wanted to do. The circumstances are obviously not ideal and I know that I'm cutting it pretty tight with savings and also taking a huge risk with using my house.
I wanted to reach out and see what you guys think about my situation and what you guys would do if in the same spot as I'm in?
I'm sorry about the layoff. I would get a job first, so that it'll be easier for you to do refinancing, renting, etc. Once you get a job, I would do a cash-out refinancing, and buy another house (maybe not in Reno, if the price is too high.) You can rent a house (if rent is reasonably affordable in Reno), and rent out the house in subject. Now you have 2 investment properties. By renting, you have an option to get a job anywhere in the country also.
sounds like you can make a decent rent income on your house. I'd keep it.
Hey Dominic, I live in Reno as well. My husband and I got into the real estate market a few years ago in Reno. Started with a couple of single family homes. Our goal is for monthly cash flow, not to flip or sell. Therefore, we like small multi family properties. Here's what we have learned. Being in Reno, as you are, we understand the pricing in this market. With that in mind, one avenue you could take would be to 1031 your residence for a multifamily property (preferably between 3-6 units). You could live in one of the units and rent the others. That way your mortgage would be paid by your tenants, more than paid if purchasing correctly. If you find something solid that needs cosmetic rehab, do thorough inspections to hopefully avoid any major unknown expenditures, you could take income from property and start to rehab one unit at a time. Remember you would be doing cosmetic work. You could get good rent here in Reno while starting your real estate business as well as have place to live while still acquiring another job. After some time, you could then move to another single family home of your choosing and have started your business. I wish you best of luck.
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