All Forum Posts by: Kate Johnston

@Justin Conatser it depends on your area. Look at what 2/2's are selling and renting for, and what 3/2's are selling and renting for, and calculate your ROI for converting to see if it's worth it.

Figure out what your margin would be in each situation. 

Option 1: Keep the CA house, rent it, and take out a HELOC to buy something in Denver.

Option 2: Sell the CA house and use the funds to buy something in Denver

Add up all your costs and profits for each option, total, and see which one leaves you with the most money at the end. That's your answer!

@Kuang Lee - To pick an area, look for good infrastructure and nearby employers. I chose the Arden Arcade.  It's 15 minutes to downtown via the freeway and a major new shopping mall was recently put in (thus good infrastructure), plus five minutes to either the UCD Medical Center or Sac State (thus stable nearby employers). I'm sure there are other areas with potential, as well. 

Also something Sac specific, keep in mind that the majority of the city is a flood zone and manage your risk accordingly.

It depends on what you would be putting that money into! Sitting in your home, the value of your money is growing at the rate your home is appreciating. You should take money out and use it to buy something if you can get a higher return. If you don't see any opportunities for a higher return, then you should leave the equity in your home.

Alas I've no idea since I'm a US citizen. I'm sure Google can help you out!

I actually did just that last year and it's going quite well. To make sure you get a good return:

1) Look for something that needs some work so that you can get a good deal on it, but not too much work so that you can bring it up to the top of the rent market. 

2) Watch out for the HOA because that's going to eat your margin long term.

3) Pick an area that will gentrify. Sacramento is seeing a housing shortage, mostly in single family homes but also in other types of housing like condos. The city will see moderate but steady growth over the foreseeable future, so buy in an area where the rents are good enough now to pay the property off on its own, and going to get better, thus giving you good long term returns. 

Hi Samuel - I wish it wasn't so, but you may be in the worst market on earth for a small scale real estate investor. Singapore's limited inventory (the whole country is one island), high demand, and strict government regulations (long term leases instead of true ownership), make this an expensive market and the only big margins I've seen are in large-scale commercial rentals. You could look into short term rentals like AirBnB that you could rent and then re-rent at a margin, but it'll be hard to build long term equity. Other than that, I would look into nearby countries. 

Where there's a will there's a way. Good luck! 

@Franklin Marte - Like Brandon said, $45k doesn't go far in the commercial world. Another route you could look at is buying into a syndicated deal as a passive investor. If you pick a good one this can give you strong returns and a front row seat to how the process works without the same risks of starting from scratch yourself, plus at the end you'll have more capital to invest with. 

Hi Brad - When I look at managing cash and debt,I focus on where can I get the highest return for my money. To create a simple scenario, say I have $10k cash. I can put that into my property, which I expect to give me some return through rent/appreciation. Or, I can borrow $10k to put into the property at 6% interest. The only reason to borrow money is if I can make more money by doing so. If I have an investment or opportunity that generates more than 6%, then I'd take out the loan and invest. If I don't have an investment that can beat 6%, then I'm going to loose money by taking out the loan and it's better to pay with my cash. 

Another factor to consider is keeping a cushion for if/when things go wrong. Personally I like to always have a cushion big enough for six months of expenses. 

I'd hold it until you're ready to commit to buying something else. It's paying its own mortgage so its accruing value, plus appreciation (Probably. I don't know the Frogtown/Elysian Valley area or it's trends.). So right now its value is growing, whereas cash sitting in an account looses value because of inflation. So, if you pulled the cash out now would you have a better place to put it where it would grow as fast or faster? If yes, go for it. If not, then you've got a good but not great investment. Sit on it until you find a great one.