Bought my first property, need suggestions or tips/id on how to get into real estate.
Bought my first property for 250k, my monthly payment is 2300. I have A DPA loan with my mortgage. DPA is at 9% interest and my mortgage it's self is at 7%. After my DPA is paid off, mortgage will drop to 2150 a month. My property is a a small 1200 sq feet ranch style home with 3 bedroom, 1 bath, 2 car garage. Even if I hurry up and pay off the DPA which is a total of 12,500 and have the mortgage go from 2300 down to 2150, I can not rent it out as is on current rent market, which around my area is about 1300 a month for a 3 bedroom. So my question if I make this into my primary residence for now until I refinance, What steps should I go about to start my real estate journey? Am I stuck until I can refinance my house? Any help would be greatly appreciated, I'm new at this and just starting off with no money. I work a 9 to 5 job and want to be financially free.
Thanks.
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#5 Real Estate News & Current Events Contributor
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My question, if you ran the numbers why did you choose to buy this property.
- rent: $1300/month and landlord pays the maintenance and cap ex.
- purchase at $2300/month dropping to $2150/month in the future and you pay the maintenance and cap ex.
You likely could rent for ~50% of your cost to own the property.
>What steps should I go about to start my real estate journey?
to be blunt, one step would be not to purchase a property that will cost you 2 times what it would cost you to rent a similar property. Next step is save for the down payment so that you are not paying 9% for DPA. Another step is to work to improve your credit score/risk so that you can get financing on an owner occupied home for less than 7%.
Do not rush to start RE investing. Be cautious including accurate and conservative underwriting. RE will not always be the optimal investment.
Good luck