I just recently got married, and am looking to delve in to home ownership. I live in the mid-west (Kansas City area). I am very interested in investing in real estate, and have some options, wanted to get some opinions. Currently, I've got about $110k in a money market. I've just signed a 12 month lease to buy some time while I figure out how to proceed. Between my wife and I, in the next 12 months, I can save about another $45k bringing the total to $155k. The options I am considering are:
1.) Purchase a primary residence that is in prime rental territory for around $130k for cash. Live in it for 2+ years while saving up a large down payment for a nicer, bigger house, worth around $225k. After moving in to the nicer house that I would be more comfortable in long term, use the paid for house as a rental. No risk, pure cash flow. Use the profits from the rental to save for a large down for a 2nd property, then 3rd, etc. This seems less risky, not maintaining a mortgage on rental property.
2.) Purchase a larger, more comfortable house (around $200k), as well as purchasing a rental. Neither house would be paid for in this case, however I would make profits immediately and be able to leverage those to purchase more property. This is risky, which is the reason I hesitate to go this route.
I want to make sure I don't stretch myself too thin. We're comfortable with moderate risk, however knowing that going with option number 2 would mean taking a large loss should the economy turn south, I feel like having a paid for rental is a safer bet, although it would take longer to realize the profits. What are your opinions?
Submitted August 13, 2017 at 10:03PM by IntelligenceMatters http://ift.tt/2fDgKyo
