All Forum Posts by: Amanda Hensley

Oh, maybe I missed something - you are buying all cash?

Losing your home to foreclosure destroys your credit score for several years.  Ruining your credit can also affect your ability to rent a place to live as well, so you could very well be living in your car.  

But it's all about personal risk.  If you feel like you have developed a solid contingency plan for every foreseeable outcome, and you're comfortable with each outcome, then by all means.  I just won't do it again personally, and can't recommend that approach.  But everyone is different :)

So you are buying the home with the hope/goal that it will increase in value and you can, in 2-3 years, sell for more than you bought?  In the interim, how you will you making money so quickly, by saving on rent?  (Be sure to include your homeowners' insurance and property tax as well)

I'm not clear on your investment strategy...

If you're banking on appreciation - be very careful.  Where we live in WA, the year after we bought our home, it lost +25% in value compared to the market.  It's come back now (after almost 10 yrs), but appreciation is not guaranteed, except maybe if you live ON the coast...

Things that can go wrong:

1) broken pipe / water damage (though your homeowners' insurance policy should cover that)

2) flooding / water damage (this happened in our rental) and typically homeowner insurance policies DON'T cover this

3) you get hurt/sick and can no longer work

4) you lose your job

Since you're admitting to being a newbie (and there's nothing wrong with that - we were all there once and may still be there!), I would suggest you post the numbers on the deal in the analysis forum and get feedback as to whether or not it's really that good of deal - you don't have to post the address or even region.  You'll have your numbers (max offer price) and all that come out of the analysis discussions.

Are you looking to wholesale this deal to someone else, or buy and hold?

Good luck to you!

This is a house you will live in, or one that you're going to rent out?

When I was about 10 years younger, my husband and I did something very similar with our first home out here in WA, and we were cash poor and house rich.  It kept me up at nights (with what ifs like - what if I lost my job, what if one of us got sick, etc, etc), so we saved up an emergency fund and if I can help it, I will NEVER put myself in that scenario again.

So I guess I would say, coming from someone who's pretty much been there and done that, I don't recommend this path.  Nothing bad came out of it for us (except that lost sleep for me), but it could just as easily have ruined us financially.

Welcome to BP!

I don't know if anyone answered your apartment building - path question. I will tell you that I, too, want to end up owning multi-unit buildings. As large as I can. And, to get my own feet wet, I started with an SFR in my hometown (2700 miles away from where I live now). That one I call "trial by fire" :) We had LOTS of expected and unexpected repairs in the first year. But it gave me the knowledge that we could DO this. And so can you.

Now we have two SFRs, and we're exploring the idea of having our 3rd me a multi-unit.  

Good luck to you Mike!  

Interesting!  It's a bit of a drive for me, so I'm not sure yet..

Depends on the bank, so call around - I have heard everything from 36% cap on the DTI to 38% to 42% (though that was when banks were lending to any "warm bodies" several years ago).

My skin is crawling...