I've been doing a lot of research, trying to figure out the best options. I've seen the route of wholesaling and watched several of Sean Terry's videos, I've checked out lease options, and listened to what Kris Krohn and others have to say, I've checked out flipping, and even buying properties owing back taxes.
I don't have a ton to invest out of pocket, but have a line of credit I could utilize if the money is more of a sure shot. Obviously, I understand investing is always a risk.
The problem I run into is, I already have a house, don't plan on selling though. It is financed through FHA, so I can't really buy anything else at 3% down, as long as I understand properly. And I don't really have enough to buy with 20-25% down unless I pull equity from my current house. I just don't want to be stuck with this house forever, so I'm in a sticky spot where I'm not ready to move, but also don't want to end up paying on it longer than necessary for when the time comes.
Ideally, I'd like some form of secondary income so I can pay this house off and have a substantial amount of equity as opposed to what it has gone up from market adjustment, plus what I've paid down. (About 60-70k from 2018-present).
I live in New Hampshire, and it seems as though the New England market is quite inflated compared to other parts of the country. However, I also see that average real estate investment salaries in New Hampshire are in the top 5 in the country, so there's clearly money to be made. I just need to figure out the best route for me, personally, to get involved without losing my shirt right out of the gate.
Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes
5y
If you had the money to do something, what would that something be @Cody Duval? New England as a whole is beautiful, but New Hampshire certainly has a special place in my heart. I think if you back your way into this by asking yourself some questions about the end goal you may be able to make a plan around what you would like to do.
New England does have higher price points, but we also have higher rents for the most part.
@Filipe Pereira you bring up a very good point. I shouldn't let the high cost of entry cloud my judgment and get in the way of long-term gains. Ideally, given the position that I'm in right now, where my mind is going in multiple directions, I'd want to find someone that has some experience so I can work with them on a deal or two, see how things work, figure out if their preferred methods align with mine, and make a little capital while doing so. I currently have a decent paying job, but have bills (student loans, auto loan, mortgage). I should have the auto loan paid off before the end of the year, and should be able to refinance the mortgage once more comps become available during the summer (I live in a lake town so the available comps tend to be small camps, and they prevent my house from appraising). This should free up a decent amount of monthly capital, that I would like to save and reinvest elsewhere.
Ideally, I'd like to come close to replacing my annual income via rentals. Flips don't really interest me much since there is so much time devoted to the actual flipping process, as well as a large chunk of cash required to pay for the flip. Once I get capital flowing, my mindset may change as I see it as a great way to get larger paydays, and I know how to do a lot of work myself, and even if finance/insurance structure doesn't allow that, I know enough to not get soaked by contractors. I'm a corporate pilot, but I'm not even close to the pay I could be making, but for me to get there, I need more ratings, which are very expensive. So, if I could come close to replacing my salary, it would allow me to pay more towards my current mortgage, as well as pay for the ratings I need to advance my career, which would mean more capital towards real estate. I'm basically trying to intertwine my current career and my desire for investments to fund each other, until my investments put me in a place where my career is no longer as important for paying the bills.
So, given your question, I think rentals with the ability to hold on to them and then pull equity from them to continue building a collection of rentals over time would be my ideal end goal. I just need the know how, experience, and capital to get started. I considered wholesaling as a means to acquire the initial capital, while getting a decent handle on the market around me, but after more research, it seems as though, not living in a very populous place such as Miami, Dallas, Denver, etc. would make this quite tricky. It seems as though a majority of wholesalers do very well when they reside in or near larger, booming cities with lots of inventory within a stones throw.
From the start of my research, I have focused more on rental properties that gain equity over time. This is mostly because I have seen my house outpace every stock/index fund/etf etc. out there, and in less than 3 years, has gone up nearly 50% in value. So, if I can't find someone with the know how, experience, and capital to work with me on a few deals to get me started on this journey, I think my best bet is to get my liabilities paid off, refinance the house, and take the saved capital and start banking that towards assets. 20-25% down on a New England home in a year or more could be quite substantial though, so that's why I'm trying to find a path to get involved sooner rather than later.