New member from Arkansas with a question

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New member from Arkansas with a question

Jeremy Woody
Fort Smith, AR · Member since 2016 · 7 posts · 7 votes

Hello, all.

In my quest to repair the wreckage of my past, I have discovered real estate investing and this site. I have been reading quite a bit and wanted to share a brief summary of what led me here and questions that I have.

I am a Speech Language Pathologist with massive student debt. It is going down, but not as fast as I want. I fell into the "Rat Race" trap and have been working on changing that. I had medical issues and addiction issues years ago that left me with a horrific credit rating and massive debt. I am 41 and have no retirement. So, I am behind but an eternal optimist. I got healthy physically, emotionally, mentally and now am working on financial. I was able to improve my credit score from 400's to mid 700's and it keeps climbing. So as I am finishing up paying off my credit cards, I am looking into real estate investing. I still have a mortgage and a car loan. I rent out my back room for $600 a month. My mortgage is $1030 so that helps with the mortgage a lot. 

I have a few questions. I have listed them below.

1. Should I continue to live in my home with a roommate and work on deals in other areas?

2. Sell my home (only been here three years. I will not make much after fees if any) and start looking for deals for house hacking, etc.? I have an FHA loan here so I couldn't get one of those for 3 years post sale, but could still get a mortgage. Maybe a 203K, etc.

3. Refinance and take any equity out to assist with deals?

Thank you in advance for any input you can provide. I enjoy learning and am excited to read anything you can offer. 

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    10y

    1) yes

    2) you are already house hacking by having a roommate. Any advantage you might get by selling and moving to another property will be eaten up with transaction costs. 

    3)  you have already said you do not have much equity. However if you can get some cash via a heloc that can be useful. Keep in mind, leveraging your home to the max ads risk.

    It appears to me you are clearly on the right track. Don't crash and burn because you run down that track to fast.

    I don't know your exact situation, however my best guess at a plan for you is build cash reserves, While doing that learn as much about investing as you can. At the same time network and learn your market. Learning your  market means looking at and evaluating LOTS of deals. This includes deals not just listed deals but deals offered by wholesalers, other investors deals etc. 

    At some point in this process you will come across a deal that you realize is not only a great deal but you can pull it off. by that time you will have the network and knowledge to have the confidence to pull the trigger and will be on your way.

    At 41 you are starting younger than I did. You have plenty of time as long as you use it effectively. Good luck.

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  • Jeremy Woody
    OP
    Fort Smith, AR · Member since 2016 · 7 posts · 7 votes
    10y

    Thank you so much! This is great advice. It seem to align with my gut so that is good. I am lucky to have been networking via a nonprofit I help with and I know the housing market pretty well. My agent is the number 1 producing agent in the city but is also a close friend. I think this will help a lot as well. My savings is nothing near what it should be so I think cash reserves are a definite need. Again, thank you!

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