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Matthew G.
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New Investor - Next Steps?

Matthew G.
Posted Aug 26 2020, 08:59

Hello everyone,

New RI investor here. The purpose of this post is to ask for guidance on next steps you might recommend for a new investor in the area, as well as to introduce myself to the community. I've read and watched just about all the content I can find about real estate investing and have attended the local real estate investors group meetings via Zoom. Now I'm trying to step up my local knowledge and get the ball rolling!

Your RI specific opinions would be really helpful to hear on the below topics.

1. Rent vs. Sell: I own a small one family in West Warwick which I live in. I was fortunate enough to have bought towards the bottom of the market and purchased the house for cheap. I have a fairly low remaining balance on my mortgage at a low interest rate. Through significant renovations to the house with sweat equity and general appreciation, I believe it will sell for a fair bit higher than my purchase price.

I'm having trouble deciding on whether or not I should sell this property while the market is hot, or sit on it for a bit longer while I seek investment property elsewhere, with the final goal of keeping it as a rental in my portfolio. I aim to be a buy and hold investor in the area.

Here are my considerations:

- The previous owner performed many extremely janky DIY projects. I've fixed what I can, but there remain some issues which would cause me to strongly benefit from an inspection waived buyer (I have heard this is common in housing markets right now, is this common in our area?)

- The house's roof is structurally fine but will likely need repair or to be redone in the next 5ish years. The roof is flat which concerns me if we get a bad winter, though I've had no issues so far.

- The property should cash flow by 300 or more. The mortgage would be paid off in under ten years, further increasing the cash flow.

- This is my only property, so selling now gets me a higher price for this home but also a higher purchase price for wherever I'd move.

2. Buying investment property now:

I'm sitting on a modest amount of capital and am eager to get into the game via either another affordable single family, or a multi-family, ideally in the Coventry/WW/Warwick area as I'm most familiar with them.

As with any investment, I know that timing the market can be a fool's game, however, one cannot ignore the extremely high valuations combined with economic prospects and a potential wave of evictions coming.

If you were to start over in this area, would you jump in now, given the current circumstances, or wait and see what the next few months hold?

3. Sourcing off-market deals

Frankly, I'm flying a bit blind for this one. This is both a discussion topic and networking request. Can you recommend ways for a new investors in the area to get connected enough to access non-mls properties?  Do you recommend sourcing from realtors, wholesalers? Are auctions worth pursuing?

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