First and foremost, this forum is a true blessing. The wealth of knowledge and experience here is well beyond anything I’ve come across. I’ve discussed my situation with my peers, family members, and even my girlfriend who have all encouraged me to seriously consider my proposal below. I post today welcoming any comments, concerns, critiques and suggestions. With that being said, I genuinely appreciate you taking the time to read about my situation. Sincere apologies if I come across as young, naïve, or overly confident.
As stated by the title of my post, I’m currently considering relocating from Chicago, IL to Charlotte, NC. I’m 24 years old, went to an average private University in the Midwest and work for a highly respected financial services firm. I’m confident that I could get into part-time MBA program at Kellogg or Booth and my employer would pay roughly 75% the cost. However, I’m growing more and more disenchanted with the idea. I would need to guarantee my employer two years of service at the conclusion of graduation which would put me there for another five years at the very least. Additionally, I feel like a MBA would solidify the fact that I’m now working for someone else for the rest of my life and would diminish my ever growing entrepreneurial spirit and keen interest in real estate.
My younger sister moved to Charlotte from Connecticut in October and I purchased a foreclosed townhome for her and her boyfriend to live in. The property is a two bed, two and a half bath, finished basement end-unit and is approximately 1300 square feet. I purchased the property for $38,000, putting down $10,000 with the remaining on a 30-year mortgage at an interest rate of 4.5%. After my mortgage payment, taxes, insurance, and HOA dues, I’m paying roughly $425 a month. I’ve signed them on a two-year lease at $625 per month. So far the expenses have been minimal (paint, carpet cleaning, plumber) but I’m now shopping for a new HVAC/Furnace unit that’s looking to be in the neighborhood of $4700. Not sure how the home inspector didn’t pick up on this one, but I guess it’s the joy of being a home owner, right? On a side note, at my closing I was given copies of the HUD settlement as well as a copy of my “closing documents.” Is there anything else I should have indicating that I’m the property owner?
My living expenses are roughly $1000 a month in Chicago and I’m fairly confident that I can earn close to the same wages in Charlotte. I’m thinking of making the move down, purchasing a two or three bedroom townhome, find a roommate or two and let them cover most of my expenses. I’d purchase a townhome in the neighborhood of $50,000 and put 20% down. In the event that I’m unable to find a roommate(s) right away, my expenses would still be significantly less than what I’m paying in Chicago. I would be saving aggressively with the hope to purchase more property, establish more connections in the area, and begin my mini real estate side career. While I’d eventually like to move back to Chicago in 2-4 years, I think an opportunity like this would be very rewarding and serve as a unique and hands on learning experience.
If I chose to go this route, what kind of mortgage would I need? Would I need an investment policy similar to my current property or would a primary residence policy suffice if it will be my primary residence for a few years and I later rent it out?
Leaving my friends and girlfriend would be tough, but I feel like this is one of those opportunities you just have to take. Obviously assuming I’m able to find a job. I wouldn’t move down without one in place. The last time I felt this way about a potential move was when I transferred schools (East Coast to the Midwest) and that turned out to be the best decision I ever made. I love Chicago, but feel as if it simply doesn’t make much financial sense. I look at this as an opportunity to eventually have several additional income streams. It’s pretty cool to think that I could be 27 years old and own between 2-4 properties.
Again, your feedback is certainly appreciated. I’m very eager to hear your thoughts (both positive and negative) and I appreciate your time.
All the best,