Whats up guys.. I have wanted to invest in real estate for a long time and am finally getting close to buying my first house. I have a plan that makes sense in my head but I'd like to run it by the plethora of experience on BP. Why cut my own path, right? So here it is, don't hold back-tell me everything I can do to improve:
Ideally I will find a house in the 4BR/2.5-3BA layout for under $210K. Here in Hampton Roads I can score $600-$650 a month in rent per room if I rent it out to single young professionals/military who are getting established in the area. Even with a modest down payment (FHA) and fair interest rate I have a low amount of risk (accounting for tax, insurance, utilites, and maintenance). According to my calculations, one vacancy will force me to pick up small amount of the monthly payment, and even then I would only be paying the utilities and other expenses. Given my income I would have a moderate tolerance for vacancy. As long as one room is rented at any given time the money works. At best I am building equity and even have some positive cash flow. Eventually refinance and buy another property.
One major concern that comes to mind is the risk of capital expense with my low cash reserves after the purchase. If I stick to my strategy and buy a recently flipped house, this shouldn't be too much of an issue.
What do you guys think? Does anyone see a huge risk I am missing? Is this a good idea for a young investor or are there better ways to spend my money?
