All Forum Posts by: Jonathan Lyford

Anita Anand replied about 19 hours ago Originally posted by @Michael Craig : Every successful real estate investor has made sacrifices to get to where they are. You have to be willing to get out of your comfort zone if you want to grow. Yes, the comfort zone is the hardest part for me. I can't stop thinking of all the things that can go wrong (our goal is to purchase a property that needs some fixing up to Airbnb and then BRRR). What if the market tanks, what if Airbnb is saturated, what if our other rental loses a tenant, what if, what if, what if...those humps are the hardest for me to get over. I'm just starting out to! What helped my wife and I with this was to really run the numbers on the worst case scenarios. Thankfully we are in a position where we a) have a good emergency fund and b) could cover both the mortgage on our current home and the rental is we really needed to. so, even in the scenario where the place sat unrented we wouldn't go bankrupt. For us, planning for the worst case scenarios made it easier to take the jump and get started. good luck!

I'm happy to say, as of today, nothing is holding me back! My wife and I just closed on our a new house for us and are turning the townhome we had been living in into a rental; just signed the lease today for our first tenants. Fear of making mistakes and losing money would obviously be the biggest fear, but I try to also think about the risk of NOT doing something, not just the risk of DOING something. The risk of not doing something means that I do the "normal" things that our friends are doing, and most of them are broke. I would prefer to take a risk, albeit a calculated one, and try to get a reward, and an experience, that some others wont. Fingers crossed this first one works out. Hopefully many more to come!

Thanks for the reply! Can I ask what your rationale is in saying that? Just trying to learn as much as I can from as many sources as possible. Thanks!

Hi all,

Thanks in advance for your collective wisdom!

So, my wife and I bought the townhome we live in current for 170,000 on a 15 year 3.85% mortgage. It is now worth about 200,000, and we owe about 100,000 on it. We have 8 years left to pay it off.  

We need more space and are ready to move(2 kids since we bought it), and I also have gotten really interested in real estate over the past few months, so I'm trying to figure out how to make this all work.

I've done the 4 square calculations, and in total I will have negative cash flow by around 150-200 per month. However, with the loan being close to be paid off, I'm paying down the principle by around 850 per month. Given the equity each month, I am still "making" 650-700 per month, and that is before appreciation. I ran the numbers and it came out to 11% return on my 100,000 in equity, which to me is pretty good, especially for my first try at being a landlord.

My thought is, since this is my first ever venture into real estate, it would make sense to use a property I already have, and know how it was taken care of, neighborhood etc... then sell and getting a different place I know nothing about; also, to me the downside of selling is there are costs associated with selling and then buying a new place in terms of closing costs and such, which I can avoid since I already own this place. It seems less risky to me, and it would be a way to give me the chance to learn about being a landlord before I buy my next investment property after this one.

In 8 years, it will be paid off and than cash flow over 1,000 per month.

My wife and I have good, stable jobs and live well below are means, so we don't need the cash flow monthly; this is more so just the first of hopefully many more properties as long-term investments. We also will be putting 20% down on our new home, and would still have 6 months expenses saved as an emergency fund.

I know in general negative cash flowing properties are not a great idea, but given the specifics of this situation, what do you think???  

Hi! 

I’m brand new to this site, but really interested in real estate and can use some advice from your collective wisdom. 

My wife and I are getting ready to move to a bigger house, and I’m trying to decide if it makes sense to keep the townhome we are currently in and make it a rental, or sell it and move one. Some background:

We bought the place for 170,000 and it is currently worth 200,000. 

We owe 108,000 on it. 

Mortgage, taxes, insurance etc... would be about 1030 per month. 

It looks like we could rent it for about 1500 per month. 

I did the rental analysis things on this site, and all the expenses included would come out to about 1250, leaving 250 if profit per month. Cash on cash was low(4-5% if I remember correctly) and total return was about 11%. 

So, do I turn it into my first rental property or sell it? 

My thought was, since we already own it and know about the property, it might be a good first foray into the rental world. But, I know that the return isn’t the highest either, and we could just sell this place and a) put a really big down payment on the new place b) just invest in mutual funds which are less hassle c) take the cash out of the property and buy some other rental down the line. 

What say you???

Thanks in advance for the help!