New from Stafford, Virginia NOVA

[Shawn Carney]

Good morning BiggerPockets, my name is Shawn Carney. I’m currently a full time firefighter in Northern Virginia and I’ve been listening to the podcast for a few months and just started looking at the forums. I bought my first property, a townhouse, last December as a primary residence, but ended up renting it out in July because I wasn’t spending enough time to justify spending so much on an empty house. I’m currently cash flowing $200 while using a management company. I ended up moving in with friends and renting a room. My situation has changed and when the lease is over I would be spending more time in my townhouse. My long term goal is buy and holds so I can be financially free. My question is this (I hope this is the right place), the lease on my townhouse is up in July, I need to figure out if I am going to move back in and not renew the lease or find a new place to buy and live in, I am in an expensive market so I need to figure out if I buy a new primary residence and continue the lease in July or move back in to the townhouse and then try and find another rental property. Hopefully this isn’t too long winded and actually makes sense. Thank you all in advance for you help. Looking forward to getting to know everyone!

[Eddy Dumire]

Shawn,

First, welcome brother.  I've been a vollie PWC for 24 years now.  BP podcasts are fantastic and if you didn't start with episode 1, go back to the beginning.  Every single one of them has really valuable information.  Second, are you sure you're correctly calculating what you're cash flowing?  Cash flow is not Rent - Mortgage = Profit.  Be sure you're accounting for capex, maintenance and vacancies.   If all that's true, then $200 isn't a bad start.

I'm a buy and hold guy myself and currently have 4 properties in Stafford and Fredericksburg and I'm looking to increase.  I would say that you're on the right track already and moving back into your townhouse and/or selling it would be a step in the wrong direction.  You want to be accumulating properties, not selling them.  I personally never plan to sell anything (unless I'm doing an 1031 exchange but that's another topic). 

I would also not wait until July to make this decision.  The market has softened a little for the winter so your best price would be over the next 2-3 months before the spring market heats up again.

It is a really fantastic way to build a buy and hold portfolio by getting a new primary residence every 1-2 years.  Your primary residence always has loan terms that are much more favorable than an investment property and you don't have to trade in your loan when you move out and convert it to investment.

Finally, I personally think you're wasting money with PM.  It's really not hard to manage one property and you could probably do it really easily during your off hours, but that's a personal decision for you to make.

Please let me know if I can help you out in any way.

Eddy