HI everyone. Im am so anxious to start real estate investing, but I really dont want to just jump into anything without giving it much thought or having a plan first. Im still in the education phase, of realestate investing. Ive been reading alot of books, but I actually learn more and faster if i go through the motions. Anyway. Ive been thinking about maybe moving in to my first investment home for no more than two years, fixing it up while I live there, then renting it out. Then I can buy another home, convert it into a rental, and just continue on in the same fashion never selling the previous home. Does this sound like a good idea or am I just wasting time?
I am also a newbie, so everything I say is probably not dependable.
In anycase, I know a guy who has lived in Boston for the past 20+ years, and has been doing this kind of thing. The difference is that he deals in downtown, or ocean view condos.
What he has done is to basically buy a new condo every 2-3 years, living in it for that time and then moving on to the next. According to him it is a very safe way to do REI, but it also took him about 10 years and 4 condos (in addition to the one he lived in) before he was able to pull in enough monthly income to cover all the mortgages plus his own. And, most of his money was coming from one condo that was in an area where the rents doubled in like 3 years.
He now, 20years later, has quite a “solid little nest egg” as he put it. I will just tell you that we both work for a certain telecommunications company that is currently offering an early seperation package. He is taking the package and plans to increase his “move rate” but not change his strategy.
So I would say, from second hand source, that this is a very good way to do things if you have time and don’t mind waiting for you payoff. It is defenitely a back end strategy, but after 20 years he is “set”.
This is a great strategy if you want to ease into investing with somewhat less risk. This method is great because: 1) you’ll qualify for owner occupied interest rates 2) if you need to fix it up you can look at 203k rehab loans 3) if you wil be there less than five years I would recommend looking into an adjustable mortgage (maybe interest only for a certain time period) 4) if your goal is to build passive income with rentals, look into buying duplex, triplex, or fourplex. They are more money, but are still residential loans and if you buy them right, you’ll have positive (or at least break even cash flow), from day one. Let me know if I can answer any other questions.
Win-Win investinf to you, Shawn