Newbie from Indiana wondering if now is the time?
Evansville, IN · Member since 2015 · 4 posts · 0 votes
Great question- however, only you can answer that question based on your risk tolerance and future goals. A big thing to consider is if something happens to your rental, will you have the extra cash to fix it and cover the mortgage if you have one. I'm in the boat where I want security and peace of mind so I'm debt free (except my house) and I pay cash for my houses. I know others will argue that money is cheap now so I should leverage and mathematically it makes sense. However, I've found I make better decisions when I'm not in debt and have my own leverage and flexibility. People make bad decisions when they're broke because they have fewer options. Another thing to consider is the size of your shovel. If you make a great monthly income and the debt payments is small relative to your income, that changes the situation too. I know this doesn't answer your question but it's up to you and your husband and finding some common ground in the middle. Is he even interested in rentals?
@KaSandra Shirley The thing about investing in real estate is that you definitely need to have some cash in reserves for unexpected repairs.. When investors buy properties I always warn them they should have 3-5k available for neglected repairs from the previous owners even on houses that supposedly need "nothing"...
There are several options that will not cost you a lot as well..
1) Maybe you should consider wholesaling. I will warn you it's a lot of work, but you may find some deals that are subject-to's or sandwich lease-options and those should cost you little to put in your own inventory. Nice thing about wholesaling is that you can make some cash to pay off your other debts quicker, and you get to start learning the business.. Be forewarned: wholesaling is all about your reputation. Your reputation can make or break you in the wholesaling business.
2) Subject-to's and sandwich lease-options. Pick up some deals that do not count against your credit. There is still quite a few deals like this out there. Just had one last week.
3) Get your RE license or at least take the class.. It will teach you the lawns and rules affecting your purchasing decisions and is great information to have under your belt whether you get the license or just take the classes...
as @Adrien C. already said.. It's really about figuring out your risk tolerance and going from there... Obviously you are going to need to get your husband and family on board as well, but if you go into it with knowledge and an informed decision it should be much easier to handle objections.
How many of your family are achieving financial success investing in real estate?
What matters is the quality of the opinions you accept and allow to influence your decisions.
I have people around me achieving success doing fix and flips / rehabs as well as buy-and-holds.
Debt reduction is always recommendable. I personally advise folks to create new cash flow - invest for income - and use THAT to pay down your debts. Once the debts are gone, the income continues.
My $0.02...
David J Dachtera
Yes. The people around you who don't have the success you seek have very mixed feelings about your ambitions. They love you, and want the best for you, they don't want to see you have challenges and issues. So, they discourage you from taking such big risks (in their view).
Working for a paycheck is easy - no risk (other than lay-offs) and even today there is a certain security in knowing that if you do your job, you'll get paid - until you don't. "Job security" these days is an oxymoron. (How do I know that? My job was just eliminated a week ago this past Friday.)
Here's what most folks choke on: debt is good - the RIGHT debt! Debt on income property is good. Debt in depreciating liabilities - cars, shiny things, fancy clothes, fashion items, etc. ("doo-dads") - is bad.
That said, you need to let go of the idea that, "Oh, I need my own money for this." Learn about private lenders and self-directed retirement accounts.
Of the purposes we serve in this business is that we not only provide clean, affordable housing, we can also help people grow their retirement savings by partnering with them to do fix-ups and rehabs and pay them back with interest for higher returns than they can get from Wall Street.
That's VERY useful to learn about.
So, don't shackle yourself thinking you need to be "saving for a few more years". People need you help protect their retirement accounts NOW! There's literally trillions of dollars in retirement accounts which are at risk if the market crashes again like some folks think it might. Those people NEED us!
...and the ones who will lose a good chunk of their retirement funds in the crash - if it comes - will need us to help them rebuild their retirement.
Hope this helps...
David J Dachtera
@KaSandra Shirley getting your license and working retail leads is a lot of work.. Not trying to dissuade you, but everyone and their brother knows someone who is a Realtor.. haha BUT, in most cases, one deal will pay for your education. I started out part time when I earned my license, doing deals taught me a lot, but was a lot of time and energy as well....
Like anything in life, success does not come easy. It's a lot of work!