All Forum Posts by: Lauren Taylor

Hi, we have two homes and are looking at purchasing a third. One is a rental with a 1,700 mortgage and a renter paying $1,875 per month. One is our primary with a high $3,875 per month mortgage. We are looking at purchasing a duplex to live in half and Airbnb the other half for a year, while we rent our primary (for 800-1000 below the mortgage) Then moving back to our primary and Airbnb-ing both units. The mortgage on the duplex would be $3,700. Running numbers have us paying $800 less the first year than what we are paying now, to live in the duplex (even with the primary rental shortfall). Then in year two when we return to our primary, we would be paying the same as we are currently paying. After that the payment goes increasingly down. By year 10 we would be paying 1,000 dollars total out of pocket, saving us $2,800 per month. We are eager to jump in the market and we understand this is not a big cash flow opportunity. But rather a chance to grow our portfolio and benefit from increasing rent and home values. However we are concerned with over leveraging ourselves. We only put 10% down on the primary and we only would put 5% down on the duplex. If something goes wrong with a house; the few thousand bucks we saved per month would be wiped out. Nearly 10K in mortgages is a lot, considering we haven’t paid much off on them.
Is this simply a question of how comfortable we are with risk, or are there some numbers and information we aren’t considering. As a note, we live in a quickly growing and popular market. Any insight is appreciated.

Thanks, appreciate all the feedback!

We are still exploring all options. We have folks interested in renting our larger home, in the desirable neighborhood for $3,600. This is about $250 below our mortgage payment, so negative cash flow. However, by moving into our first home, we would be spending about 2k less per month, despite the negative cash flow. We are considering this option to allow time for our larger home to appreciate. 

Hi JD, 

Thanks for the input. Great point on looking at our finances. We are quite frugal. However, we've been really upping our savings in the past few years. So about 46% of our gross earnings combined are going into different retirement accounts (Employee sponsored pension plans and various retirement accounts.) So, once taxes/SS/health insurance are taken out, our take-home is about 91K. 

Perhaps that is excessive and we should reconsider reducing our retirement contributions in order to have more capital?

Appreciate you taking the time to chime in!

Thanks all. Appreciate the feedback. Very helpful to get a perspective outside your own. 

Hi all! Big question for folks who have been in this world for a while. We are a couple who has recently been educating ourselves on real estate investing through resources like BiggerPockets. We would love to start the journey of setting ourselves up for success in the future. However, we’ve realized we’re in a tough spot and are unsure of our next steps. We’d love to get some advice or suggestions from others.

Here’s the situation:

• -We own one rental property, which we purchased in 2021 for $390,000 (at the height of the market). We have a low-interest mortgage of about $1,500, and rent it for $1,875. It’s a 900 sq ft, 3 bed, 1 bath house. It was our primary home for 2 years.
• -In the fall of 2023, we bought a primary home for $550,000 in a highly desirable neighborhood where homes typically sell for $700K–$1M+. Our house is 1,600 sq ft, but is smaller and not as desirable compared to others in the area, so it’s worth less than that. We are paying $3,900 in mortgage on this home, which is a lot for us.
• -We absolutely love this neighborhood and it would be very hard to leave.
• -Combined our salaries approximately $170,000 per year. (Not tons of room for growth as we work for the state and city)
• -Last summer we rented a room in our larger house on AirBnb, bringing in $500-$900 per month

We are considering several options:

1. -Renting out our primary home and moving to a cheaper rental. We think we could get $2,700–$3,100 in rent.
2. -Renting out the larger home on Airbnb during the summer while we live in a camper, to help offset the mortgage.
3. -Moving back to our smaller rental and selling the larger home.
4. -Selling both homes and starting the investing process over again.
5. -Selling the smaller home and using the cash to invest elsewhere.

We’re hesitant to sell the larger home because we’re not sure if we’d be able to buy back into this neighborhood at the same price, but we understand sacrifices may be necessary. The market hasn’t appreciated enough to make a significant profit (maybe $60K–$80K on each home, at best).

We very much know we’re in a less-than-ideal situation and wish we’d done more research before buying the second house. Hindsight is 2/20 and all that. Any advice or suggestions would be greatly appreciated! Thanks!