Hi everyone! I am brand new investor just getting my feet wet. I just closed 10 days ago on a tennant occupied duplex that I'm going to to be living in as well. I'm in the process of refinishing the hardwood and updating the bathroom, then just tackling some minor cosmetics before moving in. I had the misfortune a few years ago of taking a $20k a year pay cut after being discharged (honorably) from the Navy and going through a divorce in the process. To make a long story short I ended up getting stuck with all debt that we had accrued during the marriage. I ended up doing a short sale on my house and began renting again. My credit had dropped from high 700's to mid 500's after all the damage had been done. Shortly after the sale of my house I was fortunate enough to find a new job that paid more than what I made in the Navy. I worked very hard the next couple of years to catch up my debts and be on time with all payments. I was able to repair my credit enough to qualify for a new VA home loan. I still had a maxed out credit card that I just couldn't seem to pay down at all because of the amount of interest every month. I decided to fully cash out my Thrift Savings Plan (retirement fund) and pay the entire balance on my credit card. I just could not deal with the debt anymore.
I'm already itching bad to buy another property. So, my question after all of this is should I wait until I'm settled in to my duplex and my credit has rebounded from this new home loan and the new zero balance on my credit card or is it worth it to purchase another duplex or multiplex? I would love to hear all comments and concerns and answer any questions you may have. Thanks!
@Jason Wear - my quick advice would be to get settled into your current property, and go thru it for 6 months or so. Get familiar with managing a tenant, save a little money, let your credit score rebound. Also, I usually find most unforeseen or deferred maintenance issues come up in the first 6 months of owning a new property. Get those kinks worked out that might deplete some cashflow.
Then after that, go full steam on the next deal.
I generally think it is a good idea for someone to get use to home ownership and land lording, decide if it is for them after give it a try before jumping into their next property. Being a property owner, or a land lord is simply not for everyone. So best to figure that out first with a little test run.
@Andrew Kerr Thank you for taking the time to offer your advice. As much as I want to buy again already, my gut is telling me that I should wait. I'm sure getting some tennant management experience under my belt would help greatly as well.
@Russell Brazil Thanks for the advice. I understand it's not for everyone and am brand new to being a landlord. I'm excited and motivated to give it a go though. Hopefully this test run will work out successfully.
@Jason Wear Let the credit stable again to get better interest rate on next property.
@Harjeet Bhatti Thank you! It's good to have people out there like you all to keep me thinking straight.
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