Updated over 7 years ago on . Most recent reply
Planning Stage of Real Estate Investing
Hello,
My wife and I are just starting our journey towards owning investment properties and would love some advice on our current plan.
First about us- I'm 32 years old, she's 33, and we have a 9 year old daughter. We live in the Greater Boston area. Our household income is around 110k. We own a SFH with a balance of 284k @ 4.37%. Our monthly payment is $1952 ( principal, interest, ins, and taxes). The house is worth somewhere between 450k-500k. We have a HELOC for about 74k (haven't touched yet). Our credit card debt is around 10k (most of it is in interest free accounts that will be paid off this year). We have about 100k in retirement accounts (401k, IRA). Our credit scores are both in the mid 700s. I think this covers our financial situation.
Our short term goal is to purchase an investment property for renting out within the next 3 years. I'm leaning towards SFH over MFH because it seems easier for a 1st timer. I am open to both though if the level of difficulty really isn't that different.
Our long term goal is to be able to live off of the income from several properties.
Our plan for the short term goal is simply putting $200 a week into a savings account. That will give us $10,400 after year 1, $20,800 after year 2, and $31,200 after year 3. At this point we feel we should have enough for a down payment on an investment property. My wife has brought up the idea of using retirement money, but I'm against that idea because of the penalty and the loss of compounding. I would consider using the HELOC, but first we plan to do some necessary work on our primary residence (roof, siding, windows, and other small work).
What are your thoughts on our situation and plan? Any help is appreciated. Thank you in advance.
Most Popular Reply
Welcome to BP!
Sounds like you got a good plan to get started saving, as well as a good financial spot! You want to decide if a SFR or a MF works better in your area, and what tenant class you are looking into.
It really depends on your goals on touching your 401k or a HELOC.
What is your first immediate goal? I would say first define your target (MFR or SFR) with your target area, then decide what financing works best for you-