A Naming Strategy Brandon Hasn't Coined

[Jody Sperling]

Hey, all,

In mid April, my wife and I decided to make the leap and buy an investment property. Because we didn't have enough cash saved to put a 25% downpayment on a home for a commercial loan, we elected to murder two birds with one rock and applied for a personal home loan that required only a 5% downpayment. Now we're doing a few mild renovations to our current house to ready it for renters. 

Brandon Turner hasn't named this strategy that I'm aware of yet, probably because if it were your primary method of acquiring new properties you'd be dead before your portfolio was large enough to produce meaningful income...but it worked for us. My question, sorry this is so long-winded, is this: was it foolish to purchase a move-in ready home for ourselves?

I've gone back and forth on how I feel about it. The pros include, my wife's comfort. She doesn't have to endure a big renovation before move in. We can focus our available cash on the current property to maximize its value and rental appeal. The cons include the loan being too high for cash flow if we want to rent this one in a couple years, and I have to pay an extra percent for PMI.

Any thoughts would be appreciated. Omaha investors comments especially welcomed, as that is our local market.

[Dawn Brenengen]

@Jody Sperling My first and second homes ended up being my 3rd and 4th rental properties.  It's a totally fine strategy to not use so much cash to acquire new property.  I will probably not use my third primary residence as a future rental property, though. The home is too big and expensive to rent, but it will provide some tax free money when I sell in the future.