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Updated almost 7 years ago on . Most recent reply

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Ralph Mama
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Would you take the same approach?

Ralph Mama
Posted

Hi, my hub and I have $100K invested in the market for a year. The money have up and down and up and down. We are looking for a way to grow that money and this is that we had in mind.

- When we bought our current home two years ago, it was $130,000 with a 3.75% Interest rate. Even with our monthly payment of $1000, we still owe on it - $127,000. Now its worth $180,00. However, it is not in the ideal location where we want to live.  So, we were thinking instead of investing in the market, use the 100K to pay the home, then in the next year pay off the remaining $30,000. Then, after that - for the next 5 years apply $the 1000 that we use to pay the mortgage to the $500 that would go to our saving together. So that would be $1500 * 5 years = $75,000.

So, pay that $75,000 as down payment on the home where we want to live, then take a 30 year mortgage with the rest. Then, rent that first home and use the rent money to pay extra on the principal of the second that we just purchase. With regular mortgage payment, the extra rent on the principal, plus extra payment, we should be able to pay it off really quick. It will depend on the home price. After that, we can apply the rent money plus our income toward another investment property. Is this approach ideal.

We are just a family trying to build wealth with background in management but not real estates.

We are not planning on buying now because the market in Orlando is too competitive and we want to pay off the first home completely before going on that journey. What do you think of the approach? Our annual income is $60,000 and we have 1 child.

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