Well it really sounds like you want to stay in your school district! Since your Dad is a contractor are there any fixer uppers you could buy within that school district? You might be able to sell your home, buy a fixer, then refi the fixer, free up a chunk of capital and then go buy some value-add MF rentals. Fix those up, refi them, repeat, repeat, repeat!
I think you're on the right track by trying to cut your living expenses down, in order to save more capital.
I would however caution going into any deal where cash flow is negative, especially when the market is crazy hot right now and rents are at a high. These rent trends could last another 5 years or last 1 year, nobody knows. When the correction occurs, rents will drop. Especially with all of the new apartments being built north of the river right now, near Liberty and the NKCSD area specifically, this creates more options for would be renters. Supply and demand on a macro level is easy to forget when we get into the thick of a deal.
In my opinion I would keep saving money where you can now. Maybe even offer some tutoring for students on the side to get extra income. Then when you have more of a cushion, or find a killer deal, you'll be ready to leap.
Once you create your ideal criteria, stick to it. It's better to go a year or two without a deal than it is to get into something that ends up taking you for a ride.
Another thought: I really don't like the FHA loan due to the lifetime PMI attached (without doing a refi), you can however do a lump sum payment of the PMI on the front end of the loan, which will allow you to get in around 16% (these numbers are from a previous deal I analyzed) down. Just something I've heard others have done successfully and may be worth looking into.
Value adds, are going to be your best bang for your buck. Especially because of your dad and his expertise that he can bring to the table.
@ Lee Ripma
Yes, staying in the school district is ideal.
Thanks for the insight—and that’s exactly what I want to do. Just wish there were some better deals to rehab right now.
Ahhh. I had this original post in paragraphs!
Don’t know what happened, but what a mess now!
Type A English teacher nightmare!!! 😳
Ah-you've hit problem number 1, no deals! Killer deals are not usually sitting out on the MLS as is. So you might need to get creative to find a value-add project. 1) you could find something in your school district that you could add sf to or reconfigure to increase the value. 2) you could do one of the many suggested things for finding deals, direct mail, driving for dollars, wholesalers, etc.
Also, checkout the direct lender loan depot. They have a bunch of low down loans without PMI. A loan broker might be able to get you one of those as well. I am not a fan of FHA. But full disclosure I use commercial loans and don't have any of these but I have looked at the loan depot loans a lot and like them!
Amanda, considering the ages of your kiddos, I'd say, stay in the school district and be patient. It's hard to find deals but they're out there. Drive around the neighborhood and look up those distressed properties with equity. Ask those owners if they're looking to sell in the future and maybe you'll get lucky and snag one. It's great that you're driven and you seem to have a game plan. Keep up with your hard work. It's out there!
@Amanda Olvera - agree with all above. With any multi schools are critical. I know your house is killing you but don't rush into a bad deal. Have you considered simply moving into a much cheaper SFH that needs work? Renovating it and then moving in two years? I understand that doesn't eliminate your mortgage but a good way to build equity and a rental portfolio.
What part of KCMO or KCK are you looking in?
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