I did my first single family home investment. What next?

[Humberto Martinez]

Ciao BP family

I have purchased 2 years ago my first single family home. I purchased it for $485k FHA and my current balance is $458k. I've invested approximately $20k converting the garage to an in-law.

My monthly costs are $3,300/month and I take home approximately $600/month.

I believe my house is now work approximately $600-$620k (checked comps online).

I don't know what should be my next steps. Unfortunately I don't have much left over cash. I feel stuck. Since I have a loan under my name and I'm not able to put 20% on another loan. What do you suggest?

Should I sell? Should I refi?

[Amy Kendall]

You don't have to put 20% down on another investment property if you move into that property.  But that would mean you would have to rent out or sell the house you are living in now, and I'm not sure if that home makes sense as a rental.  Talk with your bank, but they usually count 75% of your rental income against that debt.  So, a good rental will not count against you in qualifying for another loan.

[Cara Kennedy]

Hi @Humberto Martinez, your renovations and improvements and estimated ARV (after rehab value) make this property sound like a great one to refinance on and go for the BRRRR method. The overall cost is high, so weigh whether you are comfortable taking on more debt, but if it's cash flowing at $600 a month and you're saving for large capital expenditures/surprises Ben it sounds like you're set up well.

Refinancing sounds like a good option to me given everything I've heard. Make sure you factor in buffer savings for capital expenditures and take into account future vacancy rates. But otherwise it sounds like a great refi candidate. Good luck!