Hey everyone. Happy to have found this great resource. My wife and I bought a duplex in the city of Syracuse back in 2012, and sold it about 7 years later. Those 7 years were cash positive, but we just weren't making enough cash flow to make it worth the trouble. Before we sold it we hired a management company to reduce the burden, but even then we decided to sell and walk away. I also probably wasn't as educated as I should have made myself, so I'm sure there were decisions that could have been handled better.
Part of the reason I wasn't willing to deal with the hassles was because I had 3 young kids. My kids are a bit older now and it would be more realistic to be able to allocate the necessary time to being a landlord. The appeal of having a second source of income is very appealing and I would like to be able to build wealth outside of my W2 job. We decided that we would like to look at getting back into real estate which is why I'm here. I think a multi family (2-4) units would again probably be the right type. I've been listening to a lot of the podcast episodes and have been doing some reading as well.
I'm very happy to get general input and advice, but I also have a few specific questions.
- I've read about A, B, C, and D class properties. I know cash flow is harder with A, and I don't want to deal with the headaches of D. Where / How can I learn what neighborhoods in Syracuse and the surrounding neighborhoods would fall into those (subjective) categories?
- I've read about the strategies of looking for cash flow vs building equity. Cash flow seems like the obvious one but I'm struggling with the concept of building equity at expense of cash flow. From what I've read, focusing on equity building would look like building equity in the first property, then once you have some equity built up you can do something like a refi with a cash out, or using the equity as collateral, to put money towards another property, and so on. But it feels like if you keep cashing out equity on your properties to buy another, you end up with multiple properties but with your equity stretched really thin, like a house of cards ready to collapse. Can someone illustrate what I'm missing?
- This ties into the previous question a bit, but we have around $70k that we could be comfortable deploying into this if we find the right deal. What % of purchase price is smart to put as a down payment? What % is typically required these days? What would be a smart strategy to put an amount like this into action? How much should I consider the impact to the higher interest rates of today?
Look forward to learning from you all.
