Hello all, long time lurker, first day poster.
I recently bought a Katrina damaged house a few doors down from our own house ( owned by my GF). I plan on renting it out. I was wondering if I could get some advice on a few things.
Some info: Purchase price was 23k, (badly damaged), costs for repairs is to run $55k, appraised @ 132k after repairs. Was going to rent it out at for about $1200-1250 a month. It will have all new electric, plumbing, walls, roof, floors, alarm sytem, etc. 3bdrm, 2 full bath, about 1350 SqFt.
I think I did good, especially for a first time investment. But I have a few questions. Should I LLC the property, being that it’s my only one? My goal is to find another damaged property and do the same thing, rent it out. I don’t want to take the loss of 43% flipping, and am willing to try my hand at landlording. So I have committed myself to getting a few rentals.
What is the best way to take advantage of my instant equity when the home is repaired? Should I finance the 78k-88k that will be the actual amount owed, or finance more, like up to the 132K and use the cash for the next project?
It turned out that I didn’t need any money down for this deal, somehow. I was told I needed 5% at closing, but the day before closing my banker said he was gong to finance 100%. I assume he would do the same for my next project? I plan on finding some more damaged homes, and taking advantage of the excellent contractors I have and fix them up also.
Thanks for any advice, I am a total newb in REI.