So glad to see this forum is here! I learned a lot from yall, if there are still people here from a few years ago. :beer
I am working with a friend who is a real estate agent. He works with investors, helping them buy investment properties. I have a few questions to start out, if you can help.
Right now, I rent an apartment from someone. My idea is to buy a multi (probably FHA) and living in one unit and renting out the other for a year, then moving out and renting the other unit. It doesnt make sense to buy a home and lease it, while I am still renting from someone else.
My agent friend has shown me some properties that I believe he is a seller agent for… I believe, not 100% sure. Some of the pictures of the homes look kind of beat up. Lets say he has them under contract to sell, and I look at the home and see things that need repaired and want to make a lower offer…this probably wouldnt be a good idea because he is a seller agent? And is asking him for comps for these homes ok?
Does anyone have resources like offer pricing, repair calculating, etc etc? I want to make sure I get all the numbers right, I dont want to buy a home and end up messing everything up.
And of course, I bought John Cash’s subject-to course years ago and I cant find the darn thing :banghead
A lot of people get their personal finances and business finances confused. Yiu invest to make money. What yiu do with that money is personal. If you want to rent a place to live that is fine.
I think Bluemoon06 is saying that the half duplex you live in, is considered a liability, or at best, part of a forced savings account, and the remaining rented half, is considered an asset.
When/if you move out and rent out both halves, they then both become assets.
Thanks for clearing that up javipa. I don’t live in a duplex now, it was just a possibility if I ended up using a FHA loan where you must live in the property for a year. I was just saying I am comfortable doing that if that’s what I needed to do.
There’s a million ways to skin a cat. Investing could include investing in half a duplex, and living in the other half. It’s just that you want to understand the difference between assets and liabilities, so that you’re not confusing issues.
Lots of investards believe they’re “investing” in the house they’re living in. No, they’re most likely not.
They’re probably losing money, except in extreme situations where the liabilities are outstripped by high appreciation, or more likely high inflation, etc. Those are freak occurrences that usually require a Democrat in office, but I digress.
Meantime, an average homeowner is paying 300k dollars out of pocket, over 30 years, for a 150k house. This would be called a 30-year, 300k dollar liability.
But if the average homeowner bought a 150k house, rented it for 30 years, the renter would pay the 300k dollars, and eventually ‘give’ the house free and clear to the owner. That would be called an asset.
Here’s a good rule of thumb for making a profitable distinctions between liabilities and assets:
Whatever you’re paying for, is called a liability.
Whatever the renter is paying for, is called an asset.