Not a deal gone bad, just not a deal: need advice!
Hi All,
I'm in the military, at my first assignment. As a lot of mil folks have probably heard, I got the advice/idea given to me to start purchasing a house at each duty assignment. So I went and purchased a home to live in & rent rooms out while I live there, to eventually rent the place out after I move. The idea was simple enough, so I thought, and I got myself a house with a zero down VA loan. I had no clue about real cash flow on a property, about capital expenditures, etc. etc. had never heard of bigger pockets, my only resource was a local real estate agent I was working with who knew about VA loans.
You don't know what you don't know, so as you can guess, I now have a nice relatively expensive house in Massachusetts that will negative cash flow when I leave.... unless I can somehow get someone to overpay (obviously not wanting to do that to someone) It was move in/rentable condition when I bought it, fresh paint and all. So I paid top dollar for it (it's a sellers market here in Mass/Greater Boston area) I think I made about 50 offers on places that were below or at asking price, some even over, and hardly got a 'best and final' request back; they were all getting over asking price. So I ended up paying over asking price for this place just to get a house out here.
Currently I'm not necessarily losing money on it since I'm living there. I'm just not sure what to do when I leave in the next year and a half. I will have very little equity in the place by time I leave so I will lose money on the sale. (If I speculate, the price of the house is estimated to go up 2% by next year so I may be able to come close to breaking even on a sale, but again only on speculation so I'm not counting on it) I should be able to rent it out and break even if I manage the place myself.
I know I don't want to invest in Massachusetts long term. I want to invest back in my home state of Michigan. As for my general goal in real estate I do want to have multiple buy and holds.
Do I take the loss now and get out when I move next year, or hold onto it and let the equity build so I (hopefully) don't lose money on the sale in a few years? Or are there better options I'm not considering, like holding onto it for longer?
On a positive note, getting this house really got me into real estate, investing, and changing my mindset on money (thanks to Rich Dad, Poor Dad)
Any advice would be truly appreciated!
-Branden