Buy and hold in Jacksonville, Fl.

[DB Brooks]

Hey guys I'm looking to buy my first sfh.  I will live in it for a few years and turn it into a rental.  I have been looking in the San Jose, San Marco, South side area mostly but the market seems to be taking off.  My max that I will spend is around 200k (though 150k would be much nicer), but most rental comps don't seem to support spending this amount.  Do you have any recommendations or advice?  I'd like to buy in a decent/nice area as I will be living in it for some time.

[Nikia Johnson]

Hello

@DB Brooks I am going to assume that your goal here is cashflow so if I am wrong in my assumption forgive me. On a 150K mortgage including Tax and Insurance not including property management would run you around 1 K a month. My experience here in Jax when you start to get to north of 1K a month the tenant pool becomes a little tight and you would have to do that to cashflow on a mortgage of that size. Two options in this scenario to optimize cashflow would be to do an interest only loan and make aggressive payments while you are in the home to pay down the principle and then only make the interest only payment while renting. With that approach it would allow you generate more cashflow when you rent but you are not paying down the principal. The second would be similar to the first but to refi prior to renting with the goal of lowering your monthly payment to increase cashflow.

Good luck!