Ok, I'm wanting to get into buy & hold but either I am at the state of 'analysis paralysis' or I am not really financially ready to do it. So I'd appreciate some advice!
This is how I stand now:
-Own my home now. $66k left on the loan ($600 month payment with taxes & insurance). House worth anywhere from $150k-$250k (have to do some more analysis to get a better number).
-Have about $30k in savings and usually able to put $2k in savings every month unless I'm paying for some other expense like a vacation or Christmas presents or an emergency
-I have no other means of retirement accounts (no 401ks or anything like that)
Where we live now, we know it wasn't going to be our "forever" home. We bought it foreclosed on for cheap and it was big enough for our family and more. But the location (being on a major road surrounded by apartments) is not ideal for our children. We know at some point, we wanted to move somewhere else. Hell, if I could just move this house somewhere, that would be nice lol. We like the house and i've put work into it but just the location...
Anyways, With the little cash reserves I have, I'm having a hard time figuring out how to begin real estate investing. Like I said, i want to buy and hold for that passive income so hopefully, someday, I could quit my job but I can't even imaging how I can buy one property, let alone, a lot more to have enough to quit my job. I don't have 20% down to put into even one more mortgage besides my own, let alone several. And even if I could, it sure seems risky to exhaust the majority of my savings, right? Obviously, I am thinking about locally in the Seattle area where the costs are high. Perhaps, I have to start at the bottom of the market somewhere else just so I could afford it better but lots of people on here have suggested to not do that as that is more risky and the returns not very high.
I thought about buying a new home for myself but getting something that would work for us would be a $300k mortgage or so ($2000k/month mortgage with taxes, insurance, etc). There goes the $2000k a month I have to save and I'd literally be paycheck to paycheck. Yes, I could rent out my old house and get some passive income that way but even with that income, I'd be pretty close to paycheck to paycheck with a lot less cash reserves (because I'd have to use it for the down payment for the new house). The other option is to still buy a new house but then sell my hold house. I'd probably get a good cash profit out of it, even if I sold it at the low end. Let's say, low end, I make $100k profit on selling it. I use some of that to put back into savings. But that still only leaves me with enough cash to probably do one other investment property around here because of the down payment I'd have to use to get an additional mortgage. Then, again, how do I get more investment properties with little cash? I don't have private lenders in my family/friends group so I'd have to rely on hard money lenders but I still don't see how that is financially viable at all with the high interest rates and balloon payment after, say, a year. I don't understand how I would make enough money in that year to be able to afford to pay the hard money lender back and also have the money to get a new traditional mortgage. Perhaps I'm missing something with how hard money lending works (i've been reading about it but it still seems confusing and not viable to me but I could easily be wrong...)
ya the other option is I stay in this house and do a cash out refinance or HELOC but, again, it just doesn't bring enough cash in to really do much with. Am I missing something on how I can start? I really want to start investing as the thought at working my career until I die just sucks (if my career even still existed until I died lol).
Thoughts? Suggestions? Advice? I'm over analyzing things? I'm a dumb *** and not understanding something? Any help is greatly appreciated! thanks everyone!
