Rental Property Investor · Aiken, SC · Member since 2019 · 129 posts · 44 votes
I'll be closing on some land that we will eventually be building a primary resident on. Given the current status of the country, what are yall's suggestions or advice on following through with the closing? I'm worried that the value of the land may be far less than what im paying for it in the coming months. Financially, I feel my W2 employment is fairly secure. Like everyone else, i'm not sure the effects this will have on tenants, which translates to overall income. My concern is in the event I exhaust my vacancy funds set aside, i'll then be relying on my W2 income to pay for any mortgages normally paid by tenants. Follow through with closing or withdraw and wait it out for a few months until things stabilize and maybe buy the same property at a cheaper price?
I don't think raw land values will take too much of a hit. More of the thing to consider is having reserves to cover the loans on all your rental properties, and a 3-6 month emergency fund to pay for your own home and life should your income get reduced a bunch. Think of each property as their own small business, and try your best to have a 3 month reserve for each individual property's mortgage. (obviously not always possible at first, but at least a goal).
@Johnathan Slater luckily we do have several months of personal reserves put aside. We also put aside 15%/month of all Gross rent for Vacancy/Expenses. That said, we just depleted a great deal of cash this past month due to establishing 3 additional LLC's and having a few closings, one being a commercial LOC. Horrible timing for us to decide to really step up the investment game and gambling on REI for me and my wife!
Nah man, never a bad time to take action. Live conservatively for the next few years, and you'll look back at now and still be pumped that you guys took action!! Good work!