Rent 1st home to enter REI?

Real Estate Deal Analysis & Advice
9yFollow

Rent 1st home to enter REI?

Kevin Jorgensen
Beaverton, OR · Member since 2016 · 55 posts · 10 votes

Hello,

I'm quiet new here, am interested in REI, but am at a crossroads and am ready for advice.

Classic question: Do I rent my home, or sell it? 

Based on the allpropertymanagement.com rentVSsell calculator, it falls on the "Rent" side of the fence.

I'm in the 97007 area code, with a house that's 11% above the median in a 'cool' market (according to Zillow - but it's nearly December, who buys houses in December? I digress). 

I foolishly bought in in June of 06' on an 80/20 100% finance loan for the 345k price.

As far as now:

- Loan at 4.25%, with remainder of $178,000

- zEstimate is $424,000

- Taxes suck at $4,400/year

- Monthly Rent zEstimate = $2,100

- zEstimate appreciation of 5.6%

I'm not keen on being a landlord, so would be interested in having PM done.

Between my wife and I, we have an income well over 200k, so either one of us could float the costs on this home if it were to go unrented.

(There happens to be a much more new home in the neighborhood also up for rent, but seems to have been this way for some time now, which concerns me, but I've yet to look at what they are charging rent)

Any good direction/advice on this I'd be keenly interested in.

Regards,

Kevin

0Reply
129 views

Most Popular Reply

Scott Radetich
Investor · Portland, OR · Member since 2016 · 47 posts · 36 votes
9y

Not sure Foolishly bought is the correct term here. You put how much down? that's right $0, and you are now up 79k (based on Zillow which we all know isn't always accurate). Can someone calculate that ROI for me? You needed a place to live, got some tax breaks now you have the chance to pull a few hundy out and do some real damage. Man do I miss those zero down loans!

After reading this post it sounds like you aren't really looking to do much real work when it comes to owning properties.  Have you looked into Turn Key providers?  Jason Hartman, has some pretty interesting products.  Listen to a few of his podcasts, it will get you thinking (he'd say sell).

as a side note, I've been pondering trading in my Portland properties. I've been told by a few real, real estate investors I need to sell all of them. But I can't pull the trigger, i'm just too conservative of an investor (and I also have a real job like yours so there's the my time factor as well). But recently, I pulled out some equity on one of them and purchased some additional properties. My goal hasn't been to be 100% into REI, I like my job and am in no rush to get out of it. But in 10 years... I'll be able to choose which direction I want to go.

 If you want a conservative suggestion that will go against a lot of investors opinions on this site, I'd cashout refi that home now as owner occupied, buy a single family rental in Portland, then with the money left over buy a new primary for you and turn your 1st home into a rental too.  Keep in mind, both of those rentals you will make very little cash flow (couple of hundred at best) but your income is high enough to where I'm assuming you don't need it.  Now you'll have three homes in Portland with potential for appreciation over the next 10-20 years and have someone else paying down the mortgages for two of them. Its a solid plan, but won't get you rich quick.  If you want to get there quicker, you're best to sell and you're going to have to buy something that requires a lot more work....

2Reply
See this reply in the discussion

31 Replies

Jump to latestLatest
  • Jason Hartman
    Rental Property Investor · Scottsdale, AZ · Member since 2012 · 314 posts · 146 votes
    9y

    We would love to do business in Portland and other more expensive markets but you just can't make the numbers work with good RV Ratios (Rent-To-Value Ratio). We're doing a lot of business in the following metro areas:

    • Orlando
    • Little Rock
    • Tampa (Port Richey)
    • Quad Cities, Ohio
    • Memphis
    • Atlanta
    • Indy
    • Chicago outer areas
    • Huntsville
    • Montgomery
    • And a few others

    I hope this is helpful! 

    1Reply
  • Kevin Jorgensen
    OP
    Beaverton, OR · Member since 2016 · 55 posts · 10 votes
    9y

    @Jason Hartman thanks. I'll check out your site. That's an easy price point to target. 

    @Scott Radetich Thanks for the info. What you've done sounds like an intriguing path to learn more about.

    1Reply
  • Oliver Fu
    Specialist · Orange County, CA · Member since 2016 · 9 posts · 3 votes
    9y

    @Kevin Jorgensen

    Hi Kevin, I'm a Senior Investment Counselor with @ JasonHartman.com, and would be happy to have a discussion with you on how we could help with your investment goals and needs.  I have sent you a personal message with my contact information. Let's set up a time to chat  :)

    0Reply
  • Randy Johnston
    Residential Real Estate Broker · Beaverton, OR · Member since 2014 · 335 posts · 149 votes
    9y

    @Kevin Jorgensen, you've come to the right place for learning more about REI. I would also suggest that you check out the local REI groups, both Rarebird and Northwest REIA hold monthly meetings.

    0Reply
  • Kevin Jorgensen
    OP
    Beaverton, OR · Member since 2016 · 55 posts · 10 votes
    9y

    @Randy Johnston Thanks Randy. That is on my to-do list. I've done a once over of each website, and intend to sit in and learn there as well. 

    I thought Realtyshares was going to be a good starting point, but just learned that I need to be accredited to take part. Close, but not quite there.

    So those to REI clubs, and possibly turn-key with a PM are intriguing to me as initial starting points.

    Also trying to figure out how my current skill-set might help an experienced person out and maybe learn a little as I go.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free