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Updated almost 2 years ago on . Most recent reply

User Stats

3
Posts
3
Votes
Monica Drobina
3
Votes |
3
Posts

Personal home is paid off - what now?

Monica Drobina
Posted

Bought our home 7 years ago with the intention of renting it out one day (didnt intend to fall in love with the area). We paid it off 3 years ago and have enjoyed stock piling money and becoming debt free but now we are eager to get into the business of real estate investing. I am in real estate for a living but have been hesitant to get back into debt - although I realize now that's a silly concept to be afraid of when I can leverage loans to increase our business/income.

The main question. Should we rent out our paid for home and use that rent to cover the cost of another home (and continue this cycle of moving every couple of years and renting out our personal homes - think lower down payment/tax benefits). We dont have children so moving around isn't a problem.

OR

Should we stay put in our paid off home and start investing into pure rentals that require more money down without any cash flow from our current residence?

I felt confident in the first option but now I'm hesitant and would love feedback. I am afraid of sabotaging the money we have managed to save over the years and want to maximize our liquidity to obtain as many doors as possible.

We are in the North Houston area and our current home would cash flow $1400/month after taxes, hoa and insurance.

Thank you!

Most Popular Reply

User Stats

655
Posts
900
Votes
Damaso Bautista
  • Rental Property Investor
  • Hawthorne, CA
900
Votes |
655
Posts
Damaso Bautista
  • Rental Property Investor
  • Hawthorne, CA
Replied

@Monica Drobina

Nice Monica!!! You have placed yourself in a great position to keep it going. Your options are countless.

At this point I think your next moves will be based on the level of risk you want to make.

If I was you I would look to see if you could pick up a good deal in your neighborhood since you love it so much. If not then don’t rent your primary and use the cash you have saved to get a rental that the numbers make sense.

Good luck I look forward to seeing your progress.

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