Okay, so I finally did it. It took me 13 months longer than I thought, but I’m going about this in a little different way.
After searching and searching for rentals, or maybe a good SFH that could cashflow, I happened to come across a very nice foreclosed house that needed rehab. People who left the house took the doors, light fixtures, knobs, pulls, etc all out of the house. The house used to be a model home so the other details of the house are all there all the way up to the $2000 water fixtures. So what we did is we bought the house st 65% of the previous tax assesed values. After all repairs are taken into consideration, we should have about 30% equity in the house. Even better, we moved into it.
Instead of selling our current house, we are turning that into a rental since we’re in a down market. I’m hoping to rent that at $500 per month over my current financing on it. After tax and insurance we’ll still clear a few hundred a month. Now I know under the slumlord formulas for repairs, I should be leaving half a months rent for expenses, which I’m not doing. It’s more like 35%. But considering $1500 - $2000 rental values, I can’t see monthly repairs and expenses at 50%.
So depending on whether this works or not, I either created a nice rental with some right offs, or else I lose money with headaches for a couple years and then sell that house at current market value whatever that is. (Currently holding about $80,000 in equity as the market sits right now, hoping if market comes back a bit in a few years I maybe get $100 - 120k in equity).
Thoughts, concerns, comments?
(By the way, this is way more fun and educational than me continually going to expert seminars that cost thousands of dollars).