Minneapolis, MN · Member since 2015 · 4 posts · 2 votes
First timer here
My question is where dose one go from here? The situation is I have my primary home and a nice rental home with great tenants and I’m going to buy a neighbor’s home near my primary home for fair price.( she need sell next year moving out of the county) Each rental should bring in 300$ profits that sound good right... but if I wanted and I do, buy another property I wont have the income to debt ratio to do that. So where can a person go from here if he want to keep managing and investing?
I would make sure that you are getting only Amazing deals when you buy them at this stage of your investment. You say you are getting $300 in cash flow. what does that mean? $300 after paying the mortgage? $300 after 50% rule and mortgage?
As far as getting more properties, I would encourage you to look at the BRRRR plan. If you are refinancing out all your money, you will have it for the next deal. If the debt to income is off then you could consider taking on a partner, or creating a business and looking at commercial or portfolio loans. don't let it stop you.
I would make sure that you are getting only Amazing deals when you buy them at this stage of your investment. You say you are getting $300 in cash flow. what does that mean? $300 after paying the mortgage? $300 after 50% rule and mortgage?
As far as getting more properties, I would encourage you to look at the BRRRR plan. If you are refinancing out all your money, you will have it for the next deal. If the debt to income is off then you could consider taking on a partner, or creating a business and looking at commercial or portfolio loans. don't let it stop you.
Welcome aboard the vibrant BP community. You already have some experience and with additional effort, will quickly climb the REI ladder to its pinnacle.
As @Joshua D. indicated you may want to look at the BRRR strategy. An example of it's use is at the link below.
To be more successful, you simply have to work on the other elements to progress your REI pursuit. Below are some quick links to get engaged on this site.
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My tenant pay 1550$ in rent and all utilities including water sewer trash. My mortgage is1300$ that includes taxes and insurance. she would like to do a rent to own contract next year. I need to learn more about that later but heard it's a good idea.
I quickly read through the BRRRR strategy. After reading it gives me a good lead on where to go next. I think I will talk with my broker who I've worked with in the past and find out how desirable I might be the some banks to secure some loans. Its good advice
As for the name don’t know what happened but I LIKE it and don't know how to change it.
That is not such a great deal. $350/month over paying the mortgage does nothing for maintenance and especially CAPEX expenditures. You could easily spend 6 months worth of rent between turnovers just if you had to repaint. If you have to replace the HVAC, you will be reaching into your own pocket. As it stands now you really have no profits from this deal for a long term hold.
That is just judging from your figures, but if I looked at this deal (based on given information) to buy a rental for buy and hold, it would not get past my first look, rules of thumb. I would not give it a second look.
My 2 cents.
My rental is my first home that that did not sell, so I put up for a rental and in 2 day I had well over 20 people wanting to look at it and 4 application. So I did a quick comp of rental in the area and went for the lower side but now looking at rentals in the area you would be right I should have asked for more for a four bed 2200sqfhome. My renter is aware of the deal she's get and is expecting a increase next lease agreement. She also wanted a rent to own contract. Do you have any experience with that kind of agreement?