Is this a good strategy? Please help.

[Diogenes Polanco]

Hello,

I lost my job (company closed down) so the bank won't lend me money because of it but my wife is working , I had her applied for a loan and she got approved. Now we own a house,  my plan is to buy another one to live in and the rent old one (I can rent It for $1200 -  mortgage $700 )  . My question is is this a good strategy to start my real state business? 

[Donald S.]

Hi Diogenes

Generally speaking getting into real estate is a great thing. Sorry you lost your job, if you're looking I hope you can find a new one soon, if you're planning on jumping into real estate maybe try to find something with a PM company or real estate company that you're qualified for. I know that may not be easy depending on your situation, but it could help with experience for your rentals. 

As for your specific questions, we would probably need more details, and probably more than should be posted on the internet to advise if this is a good idea for your situation. However from a general point of view, I would have tried to find a duplex to purchase initially, so you don't have to buy 2 properties. Since you already own the first one though, and if you can afford to purchase a 2nd, then it is usually a better idea to keep your current house and rent it rather than selling it to buy a new house. 

In business you want to hold on to assets that can give you future positive cash flow, if circumstances allow you to keep it. Selling off of assets should be done with a goal in mind, like you've hit a certain profit with it and are ready to move up to a bigger property (like a duplex or 4 family in this instance). 

Sorry I couldn't be more help. If you'd like to discuss details, I'd be happy to talk 1 on 1. 

Good luck and Cheers!

Donald