I will be moving to Maryland in April and am looking to begin acquiring assets. Would it be best for me to rent while I do that or purchase a home? I can use a VA loan for my home which would be little to no money down but I’m afraid that it could cause me to be overleveredged to buy many properties after that.
I will be going up debt free with 20K in my investment account. to give somewhat of a better view of my situation. I was thinking of trying to get maybe a quadplex with my VA loan and renting out 3 of the properties while I live in one and look for another investment home. Any help would be GREATLY appreciated. Everyone has to start somewhere.
Getting a small multi-unit and living in one unit could be a great start. Here’s something to consider for leverage… No money down on a deal you pay retail price for is bad. No money down for a deal you’re getting for 50% of retail value is good.
worry about the monthly nut vs the rental income to decide your purchase strategy. if i were you , i would do a good bit more research on rental properties and the real expenses involved in running them. this is just my opinion
I’m guessing you mean my monthly cash flow? Yes so far I have been ballparking the expences as far as mortgage , taxes, and insurance. With those taken into account I have found what seem to be some great deals but I can’t be sure until I can get up there and actually see the properties and surrounding areas.
Also does anyone know of a source for average time a rental goes unoccupied in an area? I’m guessing property managers will have a good idea.
yea lol I can agree with that one. I just would hate to get to a point where I am overleveredged to a point where banks no longer feel comfertable lending to me.
Might sound kinda archaic, but you could keep an eye on rental ads in the local paper and see how long they run for. Once you get there, drive around your target area. Make mental notes of signs out in yards. Then keep driving by periodically and see how long they stay up.
Banks will usually only go so far with you as an investor. Even if you get good deals, they’ll only invest with you to a certain point before they back away. The most important thing is getting good enough deals where the properties take care of themselves financially so they don’t drain you personally.
Thats what I’m working on now. Would you suggest setting up an LLC prior to my firsrt investment purchase? I have decided to just move into base housing so I can focus more in my investments and save the VA loan for when I can find a great deal on a multifamily unit. That way in the immediate futre I can just focus on my first investment and getting the best deal I can while learning the game. Hopefully I can create a decent cashflow off of it. Im hoping for roughly 500 net per month but I dont know if that is reasonable. Fingers crossed lol
I would advize against going the on-post housing route.
I dont know your marital situation but if your single. Why not get a place off post with a roommate. Depending on your area you might cashflow around 500 with that move alone. And thats anothe 500 that you can save toward REI.
I have never lived on post and during the Single days always had roommates. Saved tons of money and now if you choose your roommates right you dont even have to go far to hang out because you are living together.
Maybe its my big city mentality. I dont need a ton of personal space so the roommate deal always appealed to me.
About the LLC. Depending on the state your in that could get pretty pricey and now with the lending standards the banks still want a personal guarantee and you will have to get LL insuranc anyway so for a first property that you will live in I dont think it makes sense.
Living in a unit and renting the rest is not a bad idea if you are happy where you are going to live. Many people say that your home will be your best investment. I do not agree with that at all because you are paying the payments, tax, insurance, maintenance, etc. If it is a rental and your tenants cover all of that, you have positive cash flow, it appreciates and you get tax benefits now that is an investment. Huge difference, agree?
homefair.com will do a rent vs buy comparison in whatever city you choose. That will be helpful. The cheaper areas your PITI may be less then rent, the expensive markets like CA your PITI can be 3 times your rent. Your cash flow is the most important thing to consider, also consider the maintenance, upgrades and cost to sell if you do own. I hope this helps.