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Updated about 11 years ago,
Newbie investor in Denver starting out and needing some advice
Hello everyone. I have been lurking on BP for some time now, but with the start of the new year, I am really trying to put together my plan.
Here is my situation. I am an attorney with stable income, but looking to make some extra income on the side. I have plenty of equity in my home that I plan on pulling out next year for a few reasons. A few of my friends are real estate agents who are also getting into investing. They are doing fix-n-flips. My fiance is likely to be one of my partners if I go into it alone. She has the higher credit score and clean slate.
1) I am deciding on pulling out my equity which I expect to be around 60 to 80K. I am going to use PenFed, but am deciding whether to use the 5/5 or HELOC. I think I may do the 5/5 as it is the lower rate. I know there is some risk pulling the equity out for rental property, but it is sitting there and I have to pull some of it for other reasons anyways.
2) I am going to form an LLC. I don't know if I should go in with my fiance has the better credit score, she has 0 debt. or should I pay my debt down and then use mine. I am sure mortgage company will use both of ours, but I also think it may be best to use just mine in case something goes wrong, her credit is clean.
3) I prefer to invest in Denver where I live, but also my hometown is Cleveland where housing is super cheap. In Denver, I would have to finance and in Cleveland I could buy outright. Also in Cleveland I have a few more connections for repairs and maybe even managing. However, there are a few areas of Denver I really want to invest in, because the market is much better. I know of a few areas where I can buy and hold for a few years. In Denver, it would be SFH and in Cleveland, it could be anything.
4) I am also thinking of maybe joining a group instead just to learn. I could join with my Realtor friends (or even people I may meet on BP). I am just cautious of mixing business with friends. I have seen it go bad too many times.
5) I would be interested in doing a fix-n-flip, but Denver's market is so tight with it now. I rather the passive income and sell later. However, my future sister-n-law is an interior designer, which I think can be helpful and I know a enough people who could do the work, so it is a possibility. The area where I live is hot for fix-n-flips, but nearly impossible to get into cheap anymore. However, living in the area, I may be able to find the inside track through neighbors.
6) One avenue I am thinking is pulling out the equity in my house, buying a new home and renting out my current house. The reason for this, is I think renting out my current home may make the most income. My fiance and I kind of want to move anyways. However, we also like our location and it is fine for use now, but we do plan on moving in the 3-5 years.
6) This is a side note, but there is a location I think is perfect for a small shopping plaza. I know I could not finance it, but would like to know what others would do. Try to find an investor and get a "finders fee?"
7) As an attorney, I would not mind getting into real estate law as another side business. While I like certain aspects of my current job, I much rather be on the other side running my own law firm again. I plan on re-evaluating where I am at in 3-5 years and may going back into private practice.
Any advice is greatly appreciated. Thanks
John