18 YEARS OLD, and I need help Navigating through my first deal.

[Account Closed]

Hey guys! First off, thanks for clicking on this discussion. All feedback is greatly appreciated! This PAID OFF  property was given to me by my grandmother once she got her new house. 

• MY ASSETS
• My father is a Guru when it comes to anything having to do with construction. electric, framing, plumbing, painting, roofing, ANYTHING. I've been showing him BP In-order to open his eyes to the 80/20 rule so that he can learn to delegate jobs instead of trying to be a one man crew. 
• My grandfather currently operates an interior designing company that has been established for years.  
•  My grandmother operates a small home cleaning business and a Carpet & Upholstery protection service.

My family has had all the puzzle pieces laying around for years but nobody decided to put them together ..until now (:  ALL THANKS TO BIGGER POCKETS!!!

• PROPERTY INFO
• Single family
• Built in 1964
• 1,328 SqFt
• 3 bedroom / 2 bath
• Beautiful lawn "My grandma loved gardening"
• Carport that fits 2 vehicles
• ZESTIMATE $118,524   COST OF LIVING IN WEST TEXAS IS EXPENSIVE!

What needs to be done...

As of right now this property needs some work in order to get it into proper rental condition.

• CENTRAL AIR ( I'd like to get rid of all window units )
• REPAINT ( to a more neutral color, another words NOT PINK )
• REHAB ONE OF THE BATHROOMS COMPLETELY ( Average size restroom )

I would like to do a cash out refinance on this property and take out 80% of the appraisal value in order to cover expenses for the updates to the property and to have some capital to invest in another single family home or possibly get into flipping with my family.

Again i'd really appreciate feedback! I just want to make sure i go about this the right way. 

THANKS BIGGERPOCKETS FAMILY :D

[Robert Herrera]

@Account Closed Welcome to BP. You are WAY ahead of the game, since you already own the house free and clear. It is a great idea to do a cash out refi as it is tax free money, that will make you rich. It is tax free because you don't pay taxes on a loan. 

Once you rent this out, you will be one step closer to being financially free. I'm not sure of your expenses in life, but this house could help cover you biggest expense, your personal home rental costs. 

Great idea to put that cash out refi into other investments. 

Start reading more books. 

My favorite books: 

Rich Dad, Poor Dad

Richest Man in Babylon

Straight Path To Real Estate

On a side note, use the @ symbol followed by the name, to bring up the person you are trying to connect to. Click on their profile to tag them. 

Also, press the Vote button on useful info that will help others. 

Have a good day

[Rolanda Eldridge]

@Account Closed..Welcome to BP!  A great Resource!  You are on the right track..The updates considered are great ideas..Keep learning and asking questions..

[Jordan Sutherland]

Wow! What an awesome gift from your grandmother! It's funny that you said living in West Texas is so expensive. I'm just up the road in Lubbock and cost of living is pretty cheap. I know it's a different story in the Midland/Odessa area because of all the oil. It's pretty crazy how much difference a two hour drive makes. Anyways, this is a huge opportunity for you and how you handle it could greatly impact the rest of your life. You definitely want to use this opportunity wisely, and since you're on BP, I'd say your mind is in the right place. There are so many different things you could do, but I'll give you an idea of what I wouldn't personally do if I were you. First off, you talk about fixing up your house a little and getting it refinanced to cash out 80% of it's value. It might work better to try to fix it up and then refinance it, if you have the resources to do that. But if not, there's no problem with fixing it up after you get the money from the cash out refi. Then I would make this house into a rental after everything is good to go. Next, since you will still have a lot of money leftover, I would highly recommend househacking a small multi family property. You will have plenty of money for a down payment on a very nice duplex, triplex, or fourplex. I'm not sure if you have any type of income or credit because you're so young, but if you had trouble qualifying for a loan it sounds like you have plenty of people you could convince to consign with you. So you'd have a rental house bringing in a little bit of cash every month AND househacking a small multi family, you could be living for FREE! Depending on the deal, you could even be living for free and cash flowing every month from househacking. At the same time you'd be paying two mortgages down every month and hopefully having two separate properties appreciate every year. Many older people wish they would've househacked or wish they could now, because it is such an awesome strategy, but it's very different when you're married and have kids. If you're 18 years old, it just makes so much sense! I wish I could do the same, but I'm 23, married with kids, and my wife won't even let me think about it, because we've become accustomed to our cozy SFR. So i would definitely recommend what I just talked it. After the rehab of your house and the down payment of the small multifamily, you should still have a good amount of money to keep for an emergency fund and maybe enough money leftover to do some more investing. Obviously this isn't the only strategy out there, but given your situation, I personally think it would work great and give you a good start to a lifetime of real estate investing. Whatever you decide to do, BP will help you tremendously. Good luck!

[Greg H.]

@Account Closed

The most important part about getting into this business is to know your numbers ! Zillow's Zestimate is 100% unreliable in TEXAS ! We are a non-disclosure state so sales numbers are not public record .  Find a Realtor to give you some accurate comps before moving forward.  The Midland/Odessa market has softened some as oil prices have dropped.  You want to make sure you get a steal and not just a deal in your market

[Account Closed]

@Jordan Sutherland .... This is FANTASTIC advice I really appreciate it. I currently live with my parents and as long as I'm respectful of their household, I am welcome to stay at home . This will allow me to scale up my portfolio even more! I'm speaking with my dad about the cost to put in central air and the bathroom rehab. I plan on painting myself (putting some sweat-equity into it) before the refinance. Your completely right, something as simple as the paint can make a property value dramatically increase or decrease. I will definitely keep you updated with later progress👍🏽

[Account Closed]

@Greg H. Yeah I completely agree with you. I was really hesitant to use Zillow as a means of home value, considering my county assessor is only valuing the property at around 85k. How would you recommend going about finding the right realtor for my situation?

[Account Closed]

@Rolanda Eldridge ..... Thanks Rolanda I appreciate the support! I'm so excited with the opportunities the BiggerPockets community is allowing me to pursue. 

[Account Closed]

@Robert Herrera  Im a big fan of Robert Kiyosaki. He along with George Clason, and John Maxwell have played a big role in my education process. "Rich dad poor dad" was how I first got introduced to passive income. I haven't read "Straight path to Realestate" yet though. I'll definitely have to go check it out.👍🏽