All Forum Posts by: Nicholas L.

@Beth Meurer save up some cash.

@Ana Kudlack do you have cash for a down payment, reserves, and savings?  You said you were "financially independent," but I think what you may have meant is that you have no debt.  But please correct me if I'm wrong.

Would you be open to looking in other markets / other states?

@Jess Kempf the nice thing about trying it as a rental is that, if you rent it for a year and it doesn't work out, you can always sell it then. It does seem like you should consider having more savings first, though - if you have a HELOC + a traditional mortgage to buy your next property, that's a lot of debt. How much additional / for how much longer would you need to save to buy a primary without having to take out a HELOC for the down payment?

You could always try for an FHA loan to reduce the amount of the down payment needed - but if you do that, you will be paying PMI.

@Jess Kempf welcome.  Renting your existing primary is a complicated question.  A few questions:

1 - you said your primary "could cash flow around $600 monthly."  Have you really factored in all expenses - vacancy, capex, etc.?  Would you self-manage or would you hire a property manager?  Have you looked at actual rental comps?

2 -  you said one option is to "use the cash for a down payment on a new primary residence."  Does this mean you don't have enough cash to purchase another primary without pulling cash out of your existing one?  Are you working with a lender to know how much you would be able to borrow?

@Account Closed do you own a primary residence?

@Amy Sacco what are your long term investment goals?  If you buy this unit using conventional financing, you will have a ton of cash tied up in it + the unit you live in.  There's nothing inherently wrong with that if it's what you want, it's just that that cash can't be used to do anything else. 

You said "Maybe I should just rent or sell my unit and buy or rent somewhere else?"  Does this mean you're open to moving?  If so, only within CA or anywhere?

@Trevor Bullard congrats on making a plan and getting started.  This deal doesn't seem to work - but have you run more specific numbers to see what the expenses are when you move out and it's fully leased?  And, appreciation in the sale value won't help you if it's rented out and cash flowing negatively.

@Amy Sacco you haven't provided enough information on purchase price and expenses to help you with the numbers, but with that said, buying a unit to solve a neighbor / lifestyle problem is probably not a good idea.  Feel free to post more information about the price you might have to pay and what it might rent for, how much equity you have in your place, whether you'd be willing to move to a different metro area or state, etc. if you want to.

@Brianne Leichliter thanks for sharing all the details and kudos for being a professional about it.

@Jason Bentz the answer is... it depends. Many townhomes have HOA charges. But, some single families do too. In general you'll have less flexibility to do any value-add to a townhome because the footprint is fixed. Run numbers on both.