What would you do in my situation? Advice greatly appreciated

Hi, I’m am in my twenties and have taken a big interest in real estate investing. Currently, I am learning as much as possible and closing on a one family home with a current renter. 30 year 25% down. My father and I are going in the deal together more as a learning experience and to get our feet wet.

Aside from that, I live in a separate home that I purchased 10 months ago with a fha loan. Since not much was put down on the house I currently only have about 8% equity in the home.

If i were to move to another state, would it be smarter to

  1. sell my home (worried I would end up owing money or a wash at best when paying selling costs)

  2. rent the home (worried about not having enough equity in the home to count the rent as income when applying for a new home mortgage)

  3. look into a wrap mortgage or seller financing (most appealing in my mind being able to get a deposit up front and charge interest to the buyer. However somewhat worried about not being able to claim the income as with renting, and also risks associated with wrap mortgages)

My long term plan is to acquire as much passive income as possible through real estate. That combined with not profiting from selling the home have me leaning toward options 2 and 3.

I have read if you are relocated to another state for work you could be elligible for a second fha loan.

When moving to the other state i would be looking to rent or do another fha loan as I don’t have the resources to put much down on a new house.

If you’ve made it this far, thank you for reading! If you were in my shoes, would you choose one of these three options or would something else be a better option? Thanks in advance

That’s how I got started. I bought a duplex with my dad 50/50 on title when I was 20 and was still in university. I lived in part of it and rented out the other rooms separately for greater income than renting it all out as a single apartment. If you rent the whole building out to one tenant, how do you access the utility room? Just imagine you get the wrong tenant in there and they let a dog run loose against your lease, how are you going to get in the furnace/electrical room? What if they change the locks without your consent? Evictions usually are a very long and costly process. If you rent out single families, make sure it has a walk-in basement and don’t rent out the basement or if it has a utility room in an attached garage, don’t rent out the garage. Keep a part of the building unrented.

If you have to move to another state, and the job pays well and it’s worth it, I recommend you go with option 1 and take the loss. You can minimize the loss by using a flat fee realtor or a discount broker who charges 1%, but it’s not worth the trouble over $50-$100 a month net to manage something so far away.

Stay away from 3, but you might consider 2 as a rent-to-own. I personally know people who have been successful with rent-to-owns. As a rent-to-own, you can charge more and let them discount the purchase price by $100 a month, while you hold the deed until they get their own mortgage. If they don’t pay on time, you evict them like a normal tenant and they forfeit the purchase price discount deposits (all should be in your agreement). The tenants usually also take better care of your property and pay for their own repairs under $1,000 than simply renters and are usually there longer term.

Good luck.

davewinsor is correct. If you move sell the house. Real estate like politics is local.