Next Steps on my Portfolio

[Christopher Morris]

Hello BP! 

After being fully “leased up” on my first multifamily property, I’m thinking about my next one. 

There’s two strategies that are running through my head. 

First: buy another multifamily property and FHA (or 5% owner occupied conventional) again, house hacking it for max rents.

Or

Second: buy a single-family fixer upper (400-500k) home, live in it for 2 years and either sell it to avoid capital gains tax or rent it out. 

Things to note: my S.O. is pretty against house hacking (but willing to do it for a year). I live in NJ so housing prices are fairly high. I anticipate having around 100k in liquid cash for time of next purchase. 

Ideally, I’d love to house hack again for a year, then purchase a single family after a year to eventually sell or rent out. Just not sure if I am able to do all over that in NJ over a 2-3 year period with my cash on hand. 

Not exactly sure where I’d sit from a cash out refinance standpoint but it’s a thought. 

After this, I’d love to get into long distance investing / airbnbs. But that’s a convo for another day…

Let me know if I’m off on my thinking here BP!

[Alecia Loveless]

@Christopher Morris Hi Christopher. Personally I’d house hack it all day long to build up that portfolio. Depending on the individual property you buy your SO may not find it that bad. I landed a duplex with the tenant side as a 3/1 and our side is a 3/3 with a bonus room tiny office. It’s right in the center of our village and only about 3/4 miles from both our work locations.

My SO isn’t overly fond of living in our duplex (which I bought without her input) but does see the upside and the benefits of doing so each month when that rent money comes in. She also likes it a lot at tax time when those deductions come around.

If I were younger (I’m pushing 50) and my SO was more on board with the whole real estate investing program I would be moving into a new low down payment property every 14-15 months as soon as I had raised the money for a new down payment.

I will tell you if I could have put down 5% instead of 20% on my 7 properties I would only be into them for about a total of $70,000 instead of close to $400,000 which would have allowed me to purchase an additional 5-6 properties if not more.