Newbie in Raleigh, NC with Huge Opportunity

[Trey Thomas]

Hi Everyone,

My name is Trey Thomas and I'm a real estate photographer in Raleigh, NC who has been dreaming of a career in Investing for 10 years now.  I've read a lot on this site and from other sources and am pretty good friends with a few folks that have quite a bit of experience flipping and renting.  I also went to the inaugural Raleigh Bigger Pockets meet and hope to attend more in the future.  

4 1/2 years ago, I made a really good buy on my primary residence 6 blocks east of Downtown.  It was a new home then so everything is still in great shape.  I purchased the home and the vacant lot next door for $189,000.  Currently, I'm using the vacant lot as yard space.  My home and its lot are worth $225,000 now and would rent for $1500.  My mortgage is $993/mo and I owe $155,000.  I owe $10,000 on a separate lot loan which runs $184/mo.

I have my eye on a move-in ready home in a neighborhood that is just starting to see a lot of investor action.  It is priced at $139,900 and I would like to use it as my primary residence.  I will then rent my home at a $507/mo. cash flow and start construction on a new home on the vacant lot.  My contractor, who is also a friend, has built the exact home for $160,000 and I'd list it for $250,000.

Assuming I purchase the home for $135,000 and sell the new house for $240,000, I'll lower my monthly mortgage payment by $404 (incl. ins. and tax), have $70,000 equity in a home worth $225,000, profit $507/mo. from renting that home (meaning I'll have $911 extra each month), another $10,000 equity in a home worth $140,000, and gain around $55,000 cash.

Any objections or advice?