All Forum Posts by: Amy Jo Holweger

I’m looking at an off market deal I was informed of. A property - well kept in a nice neighborhood. It’s a duplex valued around $380,000. It has a 2 bed 1.75 bath 1200 sf on each side with rent $1400-1700 per side. The owner currently lives in it so we’d be taking her place and living in it as a house hack. It has a big backyard with a large shop in back, and that could possibly be rented as well. Property taxes estimated at $3900 a year.

The property is located north of Seattle, so it’s hard to find properties that meet the rules of thumb people commonly talk about. For this neighborhood I’m hoping for a cap of 4-5%.

The thing is we are new investors. We have only 15k in savings right now, own a condo we want to get out of, and no debt otherwise and excellent credit. We make about 120k a year combined so qualifying shouldn't be an issue. We currently pay $1600 combined with mortgage, PMI, taxes, and HOAs.

The idea is that we would try for a zero down loan with a lender we are in contact with. This means a substantially bigger mortgage obviously.

So should we move forward with it and take less in cash flow now because we will live in it and overall it will save us a good chunk of money every month? Then when we move, we could refinance to get to 20% equity and no longer pay PMI. Would it be a good investment then when we move and it's entirely a rental?

@Caleb Heimsoth $1094 is the total we pay which includes mortgage, taxes and PMI. I'd think repairs would be a small expense to prepare for, I'd hope, barring the water heater going down, since the HOA handles exterior maintenance and the interior is well-kept.

@Ryan D. We can rent without restrictions - there’s no rental cap.

@Caleb Heimsoth Right when we bought the condo the HOAs increased by 15%. This year they went up 2%. PMI is $47 per month. The interest is 4.37%. What would a reasonable cash flow be?

My fiance and I bought a condo about a year ago because we wanted to stop renting. The only thing we could afford in our area, Everett, WA, was a condo in a less desirable area of town. It's large, almost 1400 sf for a 3 bedroom condo built in 2001 (so it has the blonde cabinets) in a gated community that is kept up well. We bought it for $210k with 10% down. It hasn't appreciated much, maybe $10k. We pay about $1100 in mortgage and... here's the kicker... $500 in HOAs. Our realtor estimates we could maybe get $10k out if we sold and we put $20k in, and of course because of interest we haven't paid much into equity this last year.

We bought the condo before we started thinking about being real estate investors, and were planning to stay for at least 5 years and then buy a SFH. Now, it seems that the condo was a bad idea because of the HOAs, and we want to get out. What we want to do is house hack, but we don't want to lose money on this condo, even though we don't want to live in it anymore (neighbors, the neighborhood - very industrial near Boeing, and they took away our ability to have a grill, but I suppose that's neither here nor there).

Now, we could either stay here, rent it, or sell it. The problem is that we are paying $1600 total expenses for the property (WSG is included in the HOA). I would like to rent it possibly, to keep from losing money on it and maybe generate some cash flow, but I'm not sure it's possible with the HOAs. I looked at what similar apartments are selling for (I've tried hunting for what other condos in my complex rent for with little success), and the range is pretty large, anywhere from $1700-2300. We have lesser finishes, but if we refaced the cabinets (since it's cheaper than replacing, and more durable than painting) and swapped the countertops (laminate) we could likely demand more rent, especially since it's a top-floor unit with vaulted ceilings, a huge master, and no shared walls.

So, do we upgrade and rent? Upgrade and sell? No upgrades and rent? No upgrades and sell? We are also scratching our heads about how to really find out what we could rent it for, and if we can only rent it for $1800, is $200 enough cash flow (self-managed) that it would be worth keeping the property?

Thank you!

@Caleb Heimsoth I’m in growth mode as well - I’m 29 with a 9-5 currently. It’s just confusing when there are so many opinions on the best way to reach FI!

@Caleb Heimsoth Thanks for the reply! What percentages of your income do you invest in each? Mostly referring to earned income at this point, but could include other sources. I’m debating whether to prioritize buying a rental property versus investing in the vehicles you mentioned, or just going in 50/50.

I’m new to real estate and I’ve been reading a lot on real estate and finance, and I’ve started listening to the bigger pockets money podcast. However, I’m having trouble finding how to allocate my money to build a financial base while making a move towards buying my first investment property.

I'm newly debt free with 10k in savings and able to save 50% of my income. I own a condo which I live in. Im wondering how much to invest in my Roth IRA and SIMPLE, HSA, vanguard index funds, and how much to leave in cash and set aside for buying a rental property.

I’m also considering renting my condo and buying a single family home, or looking into house hacking if I can find a good deal, but I’m not sure if I should sell/rent, save for a down payment on a single family or save for buying an investment property.

How did you other folks get started?