Have Money, New To REI, But Want To Invest!
Here is my situation:
I have been wanting to invest in Real estate for some time now. for the last 6 months I have been doing a lot of studying about pre-forclosures, wholesaling, sub-tos, lease options, etc. I have not completed a deal yet...
I now am wanting to move from my current home. I owe about 80K on my house, and I can probably get about $140K for it retail. I have 2 options:
1. keep my current house and buy a new home, and rent out or lease/option the old house
2. sell my current house, use 40K of profit for 20% down payment on a new house (no need for PMI then), and use the other 20K for REI investing...
What is a better option? My main goal (like most people): make money in RE investing. I don't' want to put that money in the stock market, I want to invest it in RE.
Also keep in mind that I still want to eventually be a 'full time' REI, and regardless I will still persue pre-foreclosures and wholesaling. So could that 20K be put to good use to get my REI career started? or will my REI career be kick-started more if I rent out my current home, and start a small positive cash flow (maybe $100-$200/month), and sell the home in 5 years for MORE profit than if I sell it now?
thanks in advance for the help, and sorry about the long post. please also feel free to contact me via email or PM from my profile.
thanks!
If you are in an Appreciating area, consider following:
Keep old home, refi it now (OOL) Owner Occupied Loan. Lowest payments you can get ( consider the ARMs out there at less than 2%). Plan on selling at end of 3 years (you will have occupied 2 out of the last 5 years =NO TAXES owed to IRS)
Buy another for your Residence (OOL), Get lowest payments possible so can buy another rental.
If you get the lowest payments (ARMs) they will increase in payment each year. Consider your expected raises and will you be able to raise rents?[ Edited by pmatheson1 on Date 01/15/2004 ]
I'm definitely in an appreciating BUYING market, but from what I have been told the rental market has been suffering lately.
Anothr thing about this is that I just don't know if I'm ready to be a landlord yet. Ideally, I would be buying homes at %50 below market, hiring crew to do fixups, and selling retail for 20-30% profit.
another note: I may be able to get another investor in on my deals to begin with, who could easily double my 20K that I will have to invest...