Hi Everyone!
My names Steve and I live and am looking to invest in the South central PA area.
I've been thinking about investing in Real estate/Rentals for a couple years now and have spent time listening to the BiggerPockets podcast, researching/reading, and looking around the forums. I'm hopeful to make the jump. My goal is in the next 5 to 8 years be free of the corporate, 9-5 grind. I have the outline of a plan in place and would love to hear some feedback from the people in these forums who have the experience, and started where I'm at now.
I'm 32 years old and bought my first home, a townhome, 6 years ago. I currently live in this house. This townhome is in Lititz, PA, a small buzzing town with a lot of restaurants, bars, and shopping. There's a lot foot traffic on the weekends and seems to be an area people are eager to move into. This home is an end unit, next to a farm with beautiful views as I sit on top of a hill looking over farmland. Its a 3 bedroom, 2.5 bath. Master bedroom and bath. 2nd full bath upstairs with hallway bedrooms and a half bath downstairs in the main living area. This house also is complete with a garage and finished basement area(newly renovated) on the first floor. I have done mostly cosmetic changes throughout my years there(painting, fixtures, door replacements, flooring). I bought the property for $150,000 with little to no money down.
My current plan is to purchase a duplex, preferably in the same town, and house hack it. I will live in one of the units while renting the other. I also want to rent out my townhome. I've researched some rents in my area and even some homes in my current neighborhood. Most rentals seem to be going for $850 - $1275/month. Most of the comparable properties I have seen are lacking a 2nd full bath, or a garage. There's a townhome down the street from me currently looking for renters listed at $1250/month. This property is lacking the 2nd full bath and does not have the privacy my lot provides. I'm hoping to be able to rent my townhome for $1400/month. I have concerns that this might be asking too much but again this property has amenities that others I've checked out seem to lack. This would leave me making around $300/month over my mortgage. This does not include vacancy/repair costs. Not much but its a start.
I believe the duplex rental(don't have anything yet) wont allow me to completely cover my mortgage on that property but will help with a majority of it. I have little to no money to put down on this but believe by making this my main residence I can get away with not putting down the 20%. This will allow me to save the capital from not paying a mortgage for a year, and put that money to the side for future investment. I will still be working full time so I plan to take a year to get my feet wet in landlording, and gain experience before looking into a 3rd property. After that year, I want to cash out refi my townhome and use that for my next purchase. Hopefully, a multi unit property(the more units the better). This is when I believe I can start to make a profit in real estate rentals and really start grow that business to reach my goal stated above. Then a cash out refi of my duplex will hopefully give me capital to buy another property and so on.
I'd like to hear from folks here to see if this plan is feasible? are there any holes in the plan I'm missing? Any suggestions and tips are always welcomed.
Thank you
