New to Real Estate · Navarre, FL · Member since 2015 · 14 posts · 5 votes
Hello, I am looking for some tips or advice that will help me get into the real estate business. I will try to keep this short while giving enough facts for helpful advice. I currently have two homes that I have acquired as primary residences. The first home I bought I now rent out for 200 above my monthly mortgage payment. I still owe roughly 160k and its value today is 200k+. My initial thought is to sell it and pay off debt and start basically at ground zero. I plan to payoff my credit card debt of about 15k or take the profits of the sell to purchase my first investment property. I have steady tenants and I am not in a rush to sell, but just anxious to do something new. My plan similar to most people here which is to supplement my wife's income and eventually mine for the sake of our kid/family. I understand there are a thousand ways to "skin the cat", but I am looking for some feedback and guidance. REI is a dream job of mine I plan to pursue! Thank you in advance for any responses!
Real Estate Consultant · Camarillo, CA · Member since 2010 · 2k+ posts · 1k+ votes
10y
The 40k in equity isn't going to go very far after selling expenses. I would hang onto it and work on some ways to pick up some more. Pay down that consumer debt.
Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
10y
Hi @Joe L. I think you need to follow a debt reduction program (Debt Snowball plan) and eliminate your consumer debt while maintaining the rental that you have until the point that you are debt free. If you need some guidance on this, I recommend Dave Ramsey's Total Money Makeover program.
Your current equity position is not sufficient to do much for you, and the loss of the depreciation, appreciation and monthly cash by selling, as well as the costs to do so really just compound your situation. I have a belief that you don't sell what you want to buy. You want to be a Rel Estate Investor...so don't sell Real Estate that you have (unless there is a compelling benefit to do so).
Good luck...pick a plan to retire your debt...Dave's is one of the best...stick to the plan...it will work.
The 40k in equity isn't going to go very far after selling expenses. I would hang onto it and work on some ways to pick up some more. Pay down that consumer debt.
Jeff, thank you for the advice! Our goal this year is to pay off our consumer debt. After thinking it over hanging on to the property may be the best bet.
Hi @Joe L. I think you need to follow a debt reduction program (Debt Snowball plan) and eliminate your consumer debt while maintaining the rental that you have until the point that you are debt free. If you need some guidance on this, I recommend Dave Ramsey's Total Money Makeover program.
Your current equity position is not sufficient to do much for you, and the loss of the depreciation, appreciation and monthly cash by selling, as well as the costs to do so really just compound your situation. I have a belief that you don't sell what you want to buy. You want to be a Rel Estate Investor...so don't sell Real Estate that you have (unless there is a compelling benefit to do so).
Good luck...pick a plan to retire your debt...Dave's is one of the best...stick to the plan...it will work.
Hello @Charlie Fitzgerald you have shared some great advice and I will certainly use it. Dave Ramsey does have a proven system that I plan to follow as we have been working on paying down debt. I have been to Chris Hogan's seminar where he speaks to Ramsey's strategy and I truly enjoyed it. So far we are on track to pay our debt off and wanted to weigh our options out with our current situation. I agree with you on the equity not being quite enough to make the sell. What number would you recommend selling at to make it worth wild? your quote is great "don't sell what you want to buy"! I used it to explain the advice I received from you the wife. It made perfect sense! I have to ask what were your first steps getting into real estate? I look forward to your response.
Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
10y
Glad to hear you are familiar with Dave and Chris' programs. You will do well by following them. Selling property is a personal decision that needs to e based on your goals and desires for your family. It seems like you are in the beginning stages of building a real estate portfolio to replace income so you can have more time as a family. In that case, you hold all real estate long term and sell to further develop your portfolio down the road. I bought my first house in 1980 when I got out of the USAF. When I moved to another part of California for my job, I kept it as a rental. I bought another house to live in. When I moved from California to Las Vegas in 1994, I sold both my houses in California at a very good time and had a lot of equity to play with here.