Buy new investment or hold off

[Yuuj V.]

Hello BP!

At the current moment, I have about $50K liquid. 

I already have a house with 25% equity on a $100,000. 

The house has not had a tenant since I finished everything, hoping that changes real soon. (since about July)

I am hoping it brings in about $300+ in CF if my math is correct. That is including a PM to manage the property. 

I see another house for $90,000, with an $18,000 downpayment, (And other costs ~$30,000) I could grab that house and, if my math is correct, will CF about $300+. (even with a PM)

I am stuck and not sure what I should do.

I am for a market crash, obviously no one can predict the future. So I want cash on hand, cash is king. 

But I'm getting FOMO fever (Fear Of Missing Out). 

Should I play it safe, and wait for property 1 to get rented so I can be a little on the safer side? 

I was planning on saving up $100K for a 'Boardwalk' type property in MA, but thats such a large DP, I feel like I can do better with 1 - 2 other houses. This property is a 'heartland' type property, no where on the coast east or west. (or even south). 

This is a good problem to have, but I'm not sure what I should be looking at or if my glasses are getting foggy. 

My goal for 2020 is to have $10K passive income from properties, $350K - $500K in net worth.

This is doable, but my mind is going in so many different directions, its to the point of paralysis through analysis. 

One property is based in IL, the other potential property is based in OH (I'm a long distance investor). Both are SFH's.

Insight is always appreciated.  

[Chris Clothier]

Originally posted by @Yuuj V.:

Hello BP!

At the current moment, I have about $50K liquid. 

I already have a house with 25% equity on a $100,000. 

The house has not had a tenant since I finished everything, hoping that changes real soon. (since about July)

I am hoping it brings in about $300+ in CF if my math is correct. That is including a PM to manage the property. 

I see another house for $90,000, with an $18,000 downpayment, (And other costs ~$30,000) I could grab that house and, if my math is correct, will CF about $300+. (even with a PM)

I am stuck and not sure what I should do.

I am for a market crash, obviously no one can predict the future. So I want cash on hand, cash is king. 

But I'm getting FOMO fever (Fear Of Missing Out). 

Should I play it safe, and wait for property 1 to get rented so I can be a little on the safer side? 

I was planning on saving up $100K for a 'Boardwalk' type property in MA, but thats such a large DP, I feel like I can do better with 1 - 2 other houses. This property is a 'heartland' type property, no where on the coast east or west. (or even south). 

This is a good problem to have, but I'm not sure what I should be looking at or if my glasses are getting foggy. 

My goal for 2020 is to have $10K passive income from properties, $350K - $500K in net worth.

This is doable, but my mind is going in so many different directions, its to the point of paralysis through analysis. 

One property is based in IL, the other potential property is based in OH (I'm a long distance investor). Both are SFH's.

Insight is always appreciated.  

Yuuj,

There is no harm in being patient.  In fact, many experienced investors will tell you exactly that.  Control your FOMO and don't let it control you.  

Two quick observations.  You listed a goal for 2020 as having $10k in passive income.  Is that a milestone?  Does the number have any significance?  Or is it just a number that you came up with as something you'd like to have.  If that is the case, I would challenge you to really consider why $10k and why in 2020.  What if it could actually be a higher number one year later or two years later? 

When we set arbitrary goals as investors, it can really blind us to what is best.  It can lead to FOMO when and anxiety when patience is what you really need.  So reading through, it sounds like you are leaning toward being patient and building your funds.  I think that is a really good idea rather than buying units to try and meet a goal that may not have any major significance. 

Lastly, when people start giving you advice on price swings and bubbles and when the crash comes, you probably want to tune them out.  I had to laugh personally when I saw Memphis listed as city that suffers big swings like New York City, San Fransisco, Seattle, etc...  Sometimes we all can get caught up in a little in touting our experience and expertise.  There is not a single person on BP that can tell you exactly what is going to happen and when.  Real estate markets are both cyclical and local.  They are constantly moving although sometimes it seems like they are moving at a glacial pace.

Your best bet, in my opinion, is to keep your eyes open, allow your first property to get occupied and begin to function the way you were told all while building your funds closer to the 6 figure mark.  

Don't stretch to get started building your portfolio out of fear.  Rather, buy out of confidence that you have the exact right property based on your experience and your plan to reach your goal that you set with methodical long-term thinking.

Best to you!