First time home owner regrets. Need advice!

South Bend, Indiana
First-Time Home Buyer
3yFollow

First time home owner regrets. Need advice!

Mitchell Lawmaster
Member since 2023 · 5 posts · 4 votes

Hey everyone my name is Mitchell and it's my first time on bigger pockets forum! I'm pretty new to learning about real estate and man have I been missing out! I recently read Brandon Turner's Rental Property Investing book and it's great. But the more I learn about real estate the more I realize all the mistakes I've made. I rented an apartment for 6 years, and then recently had a house built because of acreage passed down to me not realizing the cost and being taken advantage of by the contractor because of my naivety and loopholes in the contract. My wife and I had to use a big portion of our savings and a lot of our IRA for the down payment. Now realizing I could've used all that money to potentially house hack and not use our IRA at all it sucks. I don't know how I'd be able to get into real estate investing now with having a big mortgage payment. The only idea I have so far is renting out our house and buying a duplex using the house hack rule. Just wondering if anyone has other ideas. Thanks!

3Reply
12 views

Most Popular Reply

Larry Turowski
Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
3y

@Mitchell Lawmaster we all make mistakes, even after many years of investing.  The more you do the more mistakes you’ll make. You’ll recover from this. How? If nothing else, with time. You sound quite young. You are in a much better position even with your mistakes than I was in probably into my late 30s. And you’ve got options. Sell. Rent and buy a duplex as you suggested. Sometimes it is a combination of those time and other options, like saving up more money, maybe even taking on a side gig to generate savings to use moving forward.

Don’t let the fact that you are not doing as well as possible or as you want to be distract from the fact that you are doing well. 

3Reply
See this reply in the discussion

10 Replies

Jump to latestLatest
  • Larry Turowski
    Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
    3y

    @Mitchell Lawmaster we all make mistakes, even after many years of investing.  The more you do the more mistakes you’ll make. You’ll recover from this. How? If nothing else, with time. You sound quite young. You are in a much better position even with your mistakes than I was in probably into my late 30s. And you’ve got options. Sell. Rent and buy a duplex as you suggested. Sometimes it is a combination of those time and other options, like saving up more money, maybe even taking on a side gig to generate savings to use moving forward.

    Don’t let the fact that you are not doing as well as possible or as you want to be distract from the fact that you are doing well. 

    3Reply
  • Nicole Heasley Beitenman
    Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
    3y

    How much equity is in your house? You could always do a cash out refinance or HELOC on your primary to obtain an investment property.

    1Reply
  • Randall AlanPro Member
    Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
    3y
    Quote from @Mitchell Lawmaster:

    Hey everyone my name is Mitchell and it's my first time on bigger pockets forum! I'm pretty new to learning about real estate and man have I been missing out! I recently read Brandon Turner's Rental Property Investing book and it's great. But the more I learn about real estate the more I realize all the mistakes I've made. I rented an apartment for 6 years, and then recently had a house built because of acreage passed down to me not realizing the cost and being taken advantage of by the contractor because of my naivety and loopholes in the contract. My wife and I had to use a big portion of our savings and a lot of our IRA for the down payment. Now realizing I could've used all that money to potentially house hack and not use our IRA at all it sucks. I don't know how I'd be able to get into real estate investing now with having a big mortgage payment. The only idea I have so far is renting out our house and buying a duplex using the house hack rule. Just wondering if anyone has other ideas. Thanks!

    @Mitchell Lawmaster

    First off - you don’t know what you don’t know until you know it.   So no use beating yourself up about the past.  I didn’t start investing in real estate (for profit) until I was about 48 - about 5 years ago.  So I’m betting odds are you might be ahead of the game compared to me!  So time is probably on your side!  But in that time I’ve acquired 37 doors… so I’m making up for lost time! 

    Real estate is cyclic - And the good news is that now isn’t the greatest time to get into real estate. So at least there is that!  My guess is it will be a couple of years before the housing market cycles back to more affordable price / interest rate combination to where you might feel like the market was ready but you were not.  So in the meantime you can work towards saving up funds to be ready to make that move.  

    There is also the option of selling your house and sort of hitting the reset button on your purchase - although that might not be as desirable if you love your house (since you had it built). 

    It only takes 20% down to get into a rental property. While not belittling 10’s of thousands of dollars - you might start to look at how you can move yourself in that direction to have those funds available.  Maybe it is working overtime, or a part time job.  Life sometimes has a way of bringing you money (inheritance / good fortune / luck) that you don’t always see coming.  It’s how you choose to use those opportunities over the long term that can make a difference.

    One thing worth noting… you can move to a new home that you will live in with the lower amount down (3-5% down as I understand it.)  So if you moved into another house and rented yours out you technically only have to live in the new house for 6 months to not be considered ‘cheating the system’ as to how you purchased the home (owner occupied) before you could move again.  Double check that of course, but I think that is correct. So that would mean you only needed 3-5% to buy a new place to live if you didn’t want yo put the 20% down.

    You could also partner with someone and go 50/50 on your first deal to get there faster!

    Keep a real estate focused mind and you will get there.

    All the best!

    Randy 



    0Reply
  • Troy P.
    Investor · Baton Rouge, LA · Member since 2019 · 184 posts · 167 votes
    3y

    Something I came to realize recently is.. your primary residence is not an asset, it's a liability.  It costs you money (sometimes a lot) whereas a rental property makes you money (usually).  The more expensive your primary residence, the longer it will take you to build generational wealth.  I'm not suggesting you go live in a shipping container in the middle of the woods.  Although that sounds kinda cool, that's not the lifestyle I want for myself or my family.  If you are not comfortable with your current financial situation, it is better to get on a more preferred path sooner rather than later.  I would read a few more books and get a little more familiar with how it all works before making any drastic decisions.  Make sure your numbers are conservative.  Don't think just because something rents for 1,500 and the mortgage is 1,000 you are putting 500 in your pocket.  Read through the forums.  Look at all of the mistakes others are making and learn from them.  Make some goals, choose a strategy, and stick with it.

    One option I first thought is, if you have an extra bedroom in your home, renting that out until you make a final decision on how you're going to move forward.  It would give you some landlording experience as well as making a little extra on the side.  There are many ways to get into the business, and it doesn't have to be exactly how you picture it in the books.

    Let me know if you'd like any book recommendations.

    1Reply
  • Ryan ThomsonBusiness Member
    Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
    3y

    @Mitchell Lawmaster don't live in the regret. Learn from those things and move forward.  

    House Hacking is amazing. Here are some resources I found really helpful on my journey.

    1. For podcasts I really like the Huse Hacking episodes on Bigger Pockets Podcast and other channels. Here is a playlist with the best House Hacking Podcasts I’ve found: https://open.spotify.com/playlist/4A6uLsPfdWEMmJhG4TSjyb?si=743bb403548f47fb

    2. Great beginners guide: https://www.biggerpockets.com/blog/wp-content/uploads/2022/08/Ultimate_Beginners_Guide_BiggerPockets.pdf

    3. The Book on House Hacking Strategies by Craig Curelop is also a fantastic book

    The Assumable Guy544 Reviews
    WebsiteView Page
    0Reply
  • Mitchell Lawmaster
    OP
    Member since 2023 · 5 posts · 4 votes
    3y

    @Larry Turowski Thank you for your advice and words of encouragement!

    0Reply
  • Mitchell Lawmaster
    OP
    Member since 2023 · 5 posts · 4 votes
    3y

    @Randall Alan That's awesome how you grew your portfolio so fast and at a later time! Thank you for your insight on the real estate market and I'm definitely going to look into the temporary house hack!

    0Reply
  • Mitchell Lawmaster
    OP
    Member since 2023 · 5 posts · 4 votes
    3y

    @Troy P. Thank you Troy you're absolutely right about just learning more and making sure my numbers are good before I do anything. I am actually in the process of finishing our basement and renting that out could be a great idea thanks! I'd love any book recommendations I appreciate it.

    0Reply
  • Mitchell Lawmaster
    OP
    Member since 2023 · 5 posts · 4 votes
    3y

    @Ryan Thomson Appreciate the references Ryan learning and being more informed while saving money is probably best for me right now!

    1Reply
  • Luka Milicevic
    Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
    3y

    @Mitchell Lawmaster The only way to truly learn is to do. You can read all the books and you will still make mistakes on the job. 

    I know this because I made SOOOOOOOOOO many mistakes over the years. The key is to not make them twice! 

    Firstly, what's done is done. You can't undo building the house or being taken advantage of by contractors. Those are sunk costs that you aren't going to recover and shouldn't be a consideration in your future.

    If it was me personally, I would hold this property until I get primary residence tax treatment. Then and only then would I consider selling and moving to the next thing.

    In the meantime, you can always consider house hacking a portion of the house to offset costs. 

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