Hey Guys,
I’m 25 years old and new to the Real Estate game and was just offered a great way to dive right into a great potential first investment. My grandma is living in a retirement community based condominium, and wanted to leave me a unique ‘inheritance’ persay by selling her home to me for 100k. My fiancé and I have been living rent free in the property (just paying utilities and property tax) for the past year.
The house is appraised for just under 170k, but my fiancé and I determined that it needs about 25k in repairs for a new oven, new flooring for the kitchen and living room, a new tub and toilet, and a dishwasher. It’s a 3 bedroom, 1 bath 1,100 square feet ranch style home that was built in the early 60’s. It’s a solid starter home that is equipped with Central Air, as well as a new roof that was just put on about four years ago and about 3/4’s of an acre of backyard along with two sheds for storage.
My fiancé and I have a household income of just over 120k a year, and I have just under 65k in cash in the bank. As experienced investors, if you were in a 25 year old’s shoes in this situation, would you:
A. Buy it for 100k, make zero repairs, and try to sell it for 130k and turn a very small profit?
B. Rent it out to a tenant until the mortgage is paid off, and then resell it for maybe 180k? (Accounting for appreciation)
C. Live in it for a few years, pay off the mortgage myself, while simultaneously making repairs and resell for about 190k after 4 years (assuming the housing market doesn’t plummet)
D. None of the above (I am open to suggestions!)
FYI: I live in Northern Lancaster County, PA and am about an hour from philly as the turnpike runs about two miles from the house. Also I’m currently reading “The Book On Rental Property Investing” by Brandon Turner so I am beginning to understand the benefits as well as the risks of renting out a single family home. Thanks in advance for your feedback! 😊
