thefed
Thinks s/he gets paid by the post
- Joined
- Oct 29, 2005
- Messages
- 2,203
I really admire most of you here, and take most of your advice to heart. Let me know what you think...
Here's the situation:
I'm 22 and own two houses. I owe 115k on a 140k primary residence. I also own a 45-50k property outright. It has been recently rehabbed and is rented at 500/month to a good friend. I have a 40k line of credit available on the investment property, and cant decide what to do.
I want (I WILL) retire at the age of 45....so I have 23 years to go.
SHOULD I:
1) Hang on to the investment property and let the rent bring me in a cashflow of 250/month. Use my 40k Line Of Credit secured by this property to buy another rehab like this one. (The negative here is that the home isn't in the best area. Im a bit hesitant to rent it out to someone other than my friend....it seems like it would be trouble. It may be stereotyping,but thats how i feel. Then again, this level house is almost the only kind that provides me with a 250/month cashflow). This scenario makes me think I would continue on this same path for a while. Buy,rehab,rent, borrow, repeat. It would/should help me build up a stable of rental properties and cashflow.
2) Sell the property, likely netting a 15-20k profit, and move on to another rehab. This would reduce holding costs of the next home as I would be paying all cash instead of borrowing against a LOC. IT could take 6 months to a year to sell the home in my market.
I like the idea of leverage. But I also like the idea of maximizing profit on each deal (little/no holding costs).
I think by typing this out, I've answered my question....but your feedback is welcome.
Here's the situation:
I'm 22 and own two houses. I owe 115k on a 140k primary residence. I also own a 45-50k property outright. It has been recently rehabbed and is rented at 500/month to a good friend. I have a 40k line of credit available on the investment property, and cant decide what to do.
I want (I WILL) retire at the age of 45....so I have 23 years to go.
SHOULD I:
1) Hang on to the investment property and let the rent bring me in a cashflow of 250/month. Use my 40k Line Of Credit secured by this property to buy another rehab like this one. (The negative here is that the home isn't in the best area. Im a bit hesitant to rent it out to someone other than my friend....it seems like it would be trouble. It may be stereotyping,but thats how i feel. Then again, this level house is almost the only kind that provides me with a 250/month cashflow). This scenario makes me think I would continue on this same path for a while. Buy,rehab,rent, borrow, repeat. It would/should help me build up a stable of rental properties and cashflow.
2) Sell the property, likely netting a 15-20k profit, and move on to another rehab. This would reduce holding costs of the next home as I would be paying all cash instead of borrowing against a LOC. IT could take 6 months to a year to sell the home in my market.
I like the idea of leverage. But I also like the idea of maximizing profit on each deal (little/no holding costs).
I think by typing this out, I've answered my question....but your feedback is welcome.