Starting After Selling Current Home - Agree with Approach?

Question

Hello all,

Was turned on to BP after listening to a few podcasts. All I listen to on my way into work! My wife and I are selling our current home (Massachusetts), and moving to Nashville, TN in a few months. We will begin investing in real estate once we settle in. Would love to hear if you agree this approach, or would recommend another. With the profit from our current house, we'll put 20% down on the new house (we want it to be a single-family, as we have 3 kids and want more space). As soon as we can pull equity out of the new house, we will want to begin investing in rental properties in the Nashville area. One reason we will not have enough of our own money to invest right away is we've used equity in our current home to renovate kitchen. We do plan to link up with other local investors down there, but wanted to reach out the BP crew to gain any insight. Ultimately, we want to own rental properties, and get into flipping (the right deals of course). Should rental be our first venture into real estate investing, or find a property to flip first? Other than taking out equity in the new home, any go-to financing option you recommend for first deal?

Jared Jones

Michael Jobe · Answer

Hi @Jared Jones! Hope you have a safe move here to Nashville, its a great city! As new investor living in Nashville, finding a good price home (that is not falling a part), AND able make the numbers work, is getting tight. We bought our first local rental last year and probably paid too much, but the location appreciation will be nice in the long-run, and we just re-up'd again with same tenents while increasing their rent. I agree with @Luka Milicevic in that the market prices are high right now. If it is a good buy, it is picked up pretty quick. Wish I started investing here 5-7 years ago. To @Mark Newton thoughts above, I haven't checked out Madison yet, but continue to look at Murfreesboro, Clarksville, and Jackson as possible deal options. Still learning every day, and BP has been a great place to learn and network with other investors.

Safe travels, and welcome to Music City.

Luka Milicevic · Answer

@Jared Jones no real right or wrong way with your plan.

I'm active down here and might be able to find you a home depending on what you're looking for. House prices are quite high at the moment. More than you might be used to in your market.

Jared Jones · Answer

@Luka Milicevic Thanks man. I do have a real estate agent currently down there. Will connect with you via message though to hear more about what you’re doing.

Jared Jones · Answer

@Jesse S Thank you sir. Definitely in it for long-term, and cash-flow. Though one item peaking our interest in real estate is the fact that we bought in 2013 for 199k (bank owned) and are looking at selling north of $340k. So the appreciation factor is alluring as well.

Jesse S. · Answer

I can't speak to the financing aspect, but your decision on rental vs flip might depend on the local Nashville market. I've got some friends and family in the area and from what I understand, its a pretty hot market at the moment. So if you are anchored on Nashville, it would depend on if you want to invest for cashflow vs appreciation vs a quick return with a flip, etc.

Lots to think through, but I'd start with thinking about your local market and if your goals are primarily short term or long term in nature.

Good luck!

Tom Saraf · Answer

Hi Jared,

Welcome to BP! I'm wondering if maybe you may want to use the 20% you will have up front toward the investment, or at least a portion of it. You may find it easier to put a smaller down payment toward your primary residence, and to invest the cash while you have it.

Jared Jones · Answer

@Chris Connolly Hey  Chris, thank you for the insight. For our own home I'm definitely partial to the single-family detached. You're right, 3 kids, and we want as much space to ourselves. I'm going to text my lender now. I wouldn't mind the 3% down at a higher interest rate, but I think our pre-approval amount would drop however. Everything I'm seeing in areas we are looking (LaVergne, Smyrna area) are all north of $250k.

Chris C. · Answer

to each their own and only you knownyour financial situation. but personally id put 3% dowm or something close to that (yes you will have a higher interest rate but it wouldnt be outlandishly higher) and invest the rest. or put 20% down and buy a duplex (though idk how big duplex get if you have 3 kids)

Jared Jones · Answer

@Michael Jobe Thank you good sir! Even as I come to Nashville to call home, and get into investing, I'm definitely open to looking at other areas as well.

Jared Jones · Answer

@Mark Absolutely! Thank you for the insight.

Starting After Selling Current Home - Agree with Approach?

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