Newbie from Louisville, KY

[Nate Nord]

Happy Friday BP family,

I've been in research mode for the past two months and thought it was time to come out of incognito. I am a rookie in the REI world and still have a lot more questions than I do answers. I will say, I've picked up a solid base of knowledge thanks to numerous helpful podcasts, blogs & books that have been recommended here and elsewhere.  After hearing some inspiring success stories, I'm ready to let the rubber meet the road.

I'm working full-time at the moment, and plan to keep this passive until it makes financial sense not to. I'm still not 100% sure which niche I am most intrigued by - it seems folks are seeing success in so many different ways, which excites me. The more I read and learn, I'm leaning towards a buy and hold strategy. Although It would be great to hear opinions from the community and anyone familiar with the Louisville market. 

So here's where I'm at:

I bought my first house in January of 2014 (with no intention of jumping into REI) for $135k. It was a foreclosure that needed a bit of work, but I've only put about $8-10k into it the past couple years. I refinanced it a few months ago into a 15 yr and knocked the PMI - (they appraised it for $175k). However, I'm looking to move into a different house by the end of the year and am trying explore my options:

A) I can keep the house and rent it out after I move. 

B) I can sell the house and find a different house to flip or rent. 

C) I know you're wondering why I refinanced to a 15 yr and am moving in the same year and considering selling/renting the house. (It's a long story and I know it seems odd, but I can expand in another post). However, I'm also not ruling out the thought of refinancing back into a 30 yr strictly for cash flow purposes. 

*Now for the new house, I'd like to find a SFR for a great deal that needs some work, however, I'm conflicted on the best method to track one down. Should I market? Should I look on MLS? Should I look at probates/foreclosures/subject to/REO/absentee owners/expired listings/tax delinquent/divorce/auctions, etc.? Is there a best time to buy? I have a ton of questions as you can see, and I hate to throw all of them out during my first post, but I've noticed everyone on here seems to be extremely knowledgeable/ helpful so I thought I'd go ahead and lay it all out.

Okay, I think that's enough characters for my first post! Thank you in advance for taking the time to read this far and I look forward to connecting and building some professional relationships on this board. As many of you know, starting out is like drinking from a firehouse, so I would be extremely grateful for any feedback or suggestions my more experienced BP investors have. I work downtown, so feel free to drop a line if you'd like to grab a coffee - never a bad thing to network and meet new people. Don't worry, I assure you I will repay the piper in one way or another. What goes around comes around.

Cheers and have a great weekend!

-Nate

[Michael Seeker]

Hey @Nate Nord - welcome to BP and congrats on getting started!

Regarding your options with your current house - which one best fits with your long term goals?  It sounds like you're leaning towards purchasing rental property (great decision!) so the next question is whether or not your current primary residence would make sense as a rental property.  Without any additional information, I would assume that you would be better off selling and purchasing something else with the proceeds that is better suited as a rental.  I just don't think the numbers will work that well on a $175K property as a rental in Louisville.

Regarding your new house, there are a lot of ways to go about finding something and it will depend on how much of your time you want to spend looking. The easiest approach is to have a Realtor set up an automated email to you with listings that fit your criteria. It might also be good to do something similar with FSBO and Zillow (where private sellers will list their properties). The other methods you mentioned are great for investing, but might be a huge waste of time for an owner-occupied purchase. I say this because something significantly distressed may not qualify for a conventional 30 year mortgage and then you're left dealing with commercial lenders on your primary residence (I've gone down this path and it was not fun).

It's also helpful to keep in mind that your personal residence (unless you have roommates or live in a multifamily property) is not an investment.  You might make some money on it some day, but until then it is a liability (something you owe money on and must maintain).

Feel free to shoot me a PM if there's anything I can help with!