What type of investments and why

[Stijn T.]

Hey,

First of all, I am not sure if this is posted in the correct forum. Feel free to move it if it belongs elsewhere.

I am still in the very early process of starting to look into real estate investing, I am not 100% sure it is the most intelligent decision at this point and I would like to outline my financial situation to get some advice on how to proceed.

My wife and I just got married last year, she has a house in Las Vegas worth about 140k which is 60k under water. This house is now rented out but does not flow cash in the right direction unfortunately.

Mortgage (@5.375% + taxes + insurance + HEL on this property (@5.99%) equal $1650 and we only get $1125 in rent.

First question: as she owned this property before we got married, I suppose I do not own any part in this property by default. How can this be changed and what are the costs involved?

Together, we own our residence in Reno worth about $95k with a $40k HEL (@4.25%). It is my goal to turn this into a rental (it can rent for $950/month) as soon as we can afford to move up to a nicer place in the city (we are out of town, in a great area for rentals but it's just a bit too far out).

Our income consists of $3700 (wife's pension) + $1125 rent + $3000 (my income). We have no other debt.

My question is whether it makes more sense from a financial point of view to pay down either of the houses or whether we should look into buying a property that does have a positive cash flow (there seem to be quite a few available in the Reno area) and use the left over equity from our Reno property to do so.

I don't like the idea that we are stuck with the Las Vegas property at this point and would logically conclude that paying down that property until we have a situation where the equity is at least zero is the first priority. But I am a noob so I ask you for advice.

Feel free to ask for any additional details.