This is my first time on REI Club and I am impressed with the information I have read so I thought I would try it out.
We are coming into a large sum of money, and are curious how we should invest it. Should we pay down our mortgage or put some into a new real estate investment?
We just bought our first house last september and therefore have a significant amount to still pay off (these numbers in this listing are not real numbers) let’s say $200,000 and will have $75,000 coming to us. We don’t have any other debt and would like to start investing in real estate. Should we pay down our mortgage? Or… invest this money in another property?
If, the answer is pay down mortgage, should we re-finance (our current rate is 6%) so we have lower payments or just continue making our payments having more go to principle (I assume the later of the two)?
P.S. Can you please recommend some tried and true real estate investment books you have read? Does anyone know of a good REI club in Seattle?
Study your local market. DO NOT use realtors as your guide. They are salesmen, That’s it. They SELL. Do your own home work.
In my opinion you’re in a great position here. This market (nationally) will come to you. I do not know your market so watch it, study it. Learn where it is, where it has come from, and that can tell you where it might go.
I wouldn’t touch that money until you could STEAL your first property.I always give that advice to new guy’s because the first one is where you WILL screw up. That is not a problem if you buy VERY LOW, and keep those screw ups to a minimum.
Definitely join a local RE club. Watch, listen, ask questions, but don’t follow the herd. In the last few years these clubs have become loaded with people just chasing higher prices. I think we’re past that now. But, again I do not know your market.
My advice… Don’t buy until you can literally steal a house. (buy cheap)
My opinion would be to not use the money to pay down your mortgage unless you could turn around and open a HELOC to have immediate access to it. I agree make sure the first deal you do is a great one or your investing career will be short.