Too many options/need someone to point me in right direction

[Helen Lin]

Hi there! 

I’ve been doing a ton of research, listening to podcasts, talking to a few folks, doing numbers, making spreadsheets, and I’m afraid I may be either too overwhelmed by options or over complicating things.   SEND HELP.  :-) I’m even willing to pay someone to literally consult me on my situation below and direct me in the right direction as I am finding all the options out there overwhelming.  

Short term goal: Cash Flow

Long term goal: Financial freedom  

Two properties: 

1.  Condo: Bought for 204K, currently could sell around $370K.  Currently renting at $1850 a month.  (My accountant says I’ve made $5k last year which seems like that’s a bad thing?)

2.  Townhouse: Bought for $260K, currently could sell around $370K (I live in this one) 

Got about $60K cash.

Rabbit hole #1: I originally went down the rabbit hole of thinking about selling my place to downsize into a smaller place to have a smaller mortgage.  After looking in-person at about 10 places, I realize my place was actually really awesome and everything so far on the market near me was ******.  

Rabbitt hole #2: Then went down another rabbit hole of taking my cash and investing into another smaller condo outside of the area into other towns, but I think my DTI is too high due to my self employment. Was talking to my original lender who has not been very responsive.

Rabbit hole #3: Starting research hard money lenders but still confused if this would apply to me or if I can get one.  

Rabbit hole #4: Reading the forums and talking to some folks, people seem to be against investing in condos due to HOA, so now that lead me to rabbit hole #5.

Rabbit hole #5: Researching selling my condo that I rent out for cash to put towards a bigger single family house.  Doing the math on that one and SEEMS like that COULD be better cash flow but since Ive never owned a home, but not sure about exterior or costs like snow/landscaping/garage costs since I’ve only owned condos.  

Rabbit hole #6: Looking at HELOC loans which just now is terrifying so now I feel like I'm in a decision paralysis. Hahaha.

Also, because both of my properties value went up, I can’t help but wonder if I should be taking advantage of that in some way to get more properties.  

HELP.  I am down WAY too many rabbit holes and need someone to simplify things for me.

I know I need to know my numbers, if there is a better calculator than my brain somewhere, please direct me :p

Thank you!

-Helen

[Wade Woo]

See inline in bold

Quote from @Helen Lin:

Hi there!

I’ve been doing a ton of research, listening to podcasts, talking to a few folks, doing numbers, making spreadsheets, and I’m afraid I may be either too overwhelmed by options or over complicating things. SEND HELP. :-) I’m even willing to pay someone to literally consult me on my situation below and direct me in the right direction as I am finding all the options out there overwhelming.

Short term goal: Cash Flow

Long term goal: Financial freedom

Two properties:

1. Condo: Bought for 204K, currently could sell around $370K. Currently renting at $1850 a month. (My accountant says I’ve made $5k last year which seems like that’s a bad thing?)

You still have to factor in Property Management (10%) and Vacancy (8%)
1850 x 18% = 333 x 12 = 3996

$5000 - 3996 = $1004

You actually only made $1004 per year

2. Townhouse: Bought for $260K, currently could sell around $370K (I live in this one)

Did you buy both properties in cash or was it financed with two mortgage?

Got about $60K cash.

Rabbit hole #1: I originally went down the rabbit hole of thinking about selling my place to downsize into a smaller place to have a smaller mortgage. After looking in-person at about 10 places, I realize my place was actually really awesome and everything so far on the market near me was ******.

Have you considered house hacking your townhouse?

Rabbitt hole #2: Then went down another rabbit hole of taking my cash and investing into another smaller condo outside of the area into other towns, but I think my DTI is too high due to my self employment. Was talking to my original lender who has not been very responsive.

The reason that investors don't like investing in condos is because of condo fees, you are restricted to only own what on the inside of the condo and there is less of a demand for them.

Rabbit hole #3: Starting research hard money lenders but still confused if this would apply to me or if I can get on

Hard money lenders are needed when you want to borrow for say a fix and flip

You would probably want private lenders if you need money to invest in good deals.

Rabbit hole #4: Reading the forums and talking to some folks, people seem to be against investing in condos due to HOA, so now that lead me to rabbit hole #5.

I agree.

Rabbit hole #5: Researching selling my condo that I rent out for cash to put towards a bigger single family house. Doing the math on that one and SEEMS like that COULD be better cash flow but since Ive never owned a home, but not sure about exterior or costs like snow/landscaping/garage costs since I’ve only owned condos.

If you sold your condo you would potentially have $166k.

Rabbit hole #6: Looking at HELOC loans which just now is terrifying so now I feel like I'm in a decision paralysis. Hahaha.

If you did a HELOC on the townhouse you would probably get a credit line of $370k x 80% = 298000 - 260000 = 38k

Also, because both of my properties value went up, I can’t help but wonder if I should be taking advantage of that in some way to get more properties.

Yes you should.

In summary,

1. Sell condo 166k

2. House hack and get HELOC on townhouse

3. Total: 166k + 38k + 60k = 264k

I can help you find great out-of-state deals.

HELP. I am down WAY too many rabbit holes and need someone to simplify things for me.

I know I need to know my numbers, if there is a better calculator than my brain somewhere, please direct me :p

I'm great with numbers. Maybe we can partner up.

Thank you!

-Helen