Howdy Fellow BPers. I'm hailing from Fallon, NV. A very rural ranch/farm area east of Reno. I have been thinking, planning and fantasizing about Rental Investment for about a year now. Awhile back I moved from Fallon to Olympia, WA with my 3 kids. Going from the top paid Dispatcher in the State to waiting tables and eventually a State employee, we were living in poverty. Having perfect credit and high limit credit cards, I was living off those cards to survive. The only reason I mention this is to explain my current situation. After moving back to NV, I have been steadily paying off the cards (as well as making the maybe not-so-good decision to consolidate some of them). I have been working Dave Ramsey's baby steps and am nearly out of debt, however, my credit it not so great.
Fast forward to the last few months. I am a UPS driver so I listen to BP podcast daily, as well as numerous ebooks. I finally took the jump and applied to see if I would qualify for a home. I was approved for only a $1040 a month payment (until my credit score comes up).
A peek into my current situation and future plans. I live with my long-time boyfriend in his mothers house, he only pays $400 a month rent. Lucky, I know. This has helped tremendously to get my debt paid off. He, too, was qualified to purchase a home, up to $320,000. There's no well in hell I am going to pay $2,000 a month mortgage payment. There would be no room for savings. Note: he is going to take some $$ out of his 401K, using the Stimulus exception, to pay off his debt and use as a down payment.
Our plan:
Purchase a home, live in it for 2 years, then turn into Rental #2.
When we move into new home, approach his mother to buy this home, Owner Financed for a year. - Rental #1. Pay her approx $700/mo, interest only, for a year until we can get a loan and pay her what she will agree to. (Fingers Crossed)
An idea about the market in this area: I gave our realtor 3 lists approx 10 houses each, all but 2 were not available. Houses are selling as soon as they hit the MLS, and usually above asking price. Which seems to be the norm everywhere right now. There are two PM offices in town, each only has only ONE 3/bd house for rent, $1400-$1700/mo. So, obviously renting the house will not be a problem. We also have the Top Gun Naval Training Base here, finding good renters will not be a problem either.
My cousin is my Realtor, she is also the owner of the most successful Real Estate business in the area. (She's my mentor). We went to look at the 2 available houses yesterday. Homes built in the 1950's-1970's are asking the same as the houses that are being built this month, $270,00 approx. And they are selling. We talked to the GC that is building the new homes in 2 different neighborhoods (tracks) and he's breaking ground on a house next week that we could make requests/changes if we entered escrow, $275,000. For a brand new house. Seems like a no-brainer, right?
THEN, we went to look at home that will be listed Mon/Tues. One block from the city park, close to middle and high schools and two elementary schools. At the end of a quiet cul-de-sac, 1972 3bd/1.5ba, 1,008 sq ft, completely re-done. New carpet, linoleum, cabinets, counters, tile in the bathrooms, landscaped, 1 car garage. Perfect, move-in ready rental for $208,000.
Have I lost you, yet?
New plan: buy Rental #1 in my name, make approx $500mo cash flow. Buy the new home in my BF's name, live in for 2 years, then have a new house to be Rental #3. Buy current house from mom, Rental #2 and cash flow approx $400mo. In 6 months, have 2 rentals, cash flowing significantly and in 2.5 years have 3 rentals.
Thank you for taking the time to read through my rambles. I've been cruising the forums for a couple months, reading everyone's experiences and wonderful advice that's always freely given. I am honored to have found such a community.
Feedback, criticism and experienced advice all welcomed.
