I am a new investor with an occupied condo in California. It is currently worth $300k - I purchased it for $200k two years ago. I have since moved to Texas and I am looking for a primary residence in Austin. The condo lets for $1600/mo and my mortgage and other expenses total $1370 leaving me $230 in the black each month. The current mortgage balance is $132k.
Should I sell my condo and put a large down payment on a new home OR should I hold onto the condo and borrow against it?
My long term goal is to build a real estate empire consisting of both residential and commercial properties. I am leaning toward holding onto the condo to that end.
Thanks for your good advice!
Hi, you can do either or really but if you want to build an empire in real estate, it's best to borrow your downpayment now from the condo in California. When you received the cashout deposit it to your bank, let it sit for two months this way the funds are seasoned then purchase ur homeowner occupied.
Hi, I agree with Marylou I would borrow from your condo in California. Are you looking to do an equity line of credit or a straight refinance. I would recommend doing an equity line of credit cause if you refinance you will probaley be breaking even or running a negative cash flow every month.
I think the two comments above mine are good, but here's a way to make your funds go farther:
Sell the California condo. You are not there to manage it and you have a ton of equity in it just sitting there.
Take the $150k or so and use it to buy 3 or 4 properties here in Austin. Out the required 20% down and carefully choose places that will also cash flow positive. You can possibly increase your monthly profits from $250 /month to 4x that this way.
Thank you all, this is very good. My fiancÃ© and I were talking about future finances and I am thinking of setting up my condo (and future properties) as an LLC. We have decided to keep our personal incomes separate from this rental income. I will treat it like a business.
How could I grow my "real estate company" as a separate income stream starting with my one single condo? What would you recommend for building a real estate portfolio with one property worth $300k and a debt of $132? Borrow against the debt and purchase, say, 3-4 homes and let the rental income pay those mortgages?
Thanks again for helping a rookie!
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