This week, I’m back to answering questions posed by listeners of the podcast.
Wally asks:
Should we continue to rent out our home, or should we sell it? We bought a home in California but have since moved to New York and have been renting there. After all expenses on the rental are accounted for, we receive $150/mo in profit. We estimate that even with repairs factored in, we’ll still be in the positive.
However, my husband thinks it’s better to sell the property and invest the profits. I think we’re better off keeping the house and having someone else pay the mortgage. Who has the better idea? What would you do?
Jessica asks:
My husband and I are about to relocate from the mid-west to Colorado Springs, and we anticipate making $80,000 from the sale of our house.
Should we take the proceeds from the sale and put it toward our next home? Or should we put that money in index funds instead?
For context, we plan on buying either a duplex or triplex, or doing a fix-and-flip like we did with our current home.
Terri asks:
How can I find a good real estate agent – especially one who is good with short sales and foreclosures? What are the signs of a good real estate agent?
Laura asks:
My husband and I currently own a three-family home (in which we live on the bottom floor), but in light of getting a new job that requires me to commute an hour each way, we are thinking about either converting the three-family home into three condo units and selling them, or buying another house and keeping the three-family home as a rental.
There’s another factor to consider, though: the property is located on a peninsula, and with sea levels rising, we don’t think it has long-term potential (in terms of equity).
What should we do?
P.S. Need software to manage your rental properties? Collect applications, screen tenants, and collect rent online with Cozy.co/Paula.
Resources Mentioned:
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Tracy Elevate
Thank you Paula! Great podcast. I really learned a lot about investing in real estate.
Paula Pant
@Tracy — Thanks!! 🙂
Damn Millennial
What is your opinion on waiting to purchase a larger multi family unit. For example a 12+ unit vs. buying units 1 or 2 at a time?
Paula Pant
@Damn Millennial — “Residential” refers to buildings with 4 or fewer units. “Commercial” refers to buildings with 5 or more.
Residential financing/loans are cheaper and easier to obtain, especially for beginner investors. Lenders who are issuing loans on commercial properties will require a written business plan and projections, a history of investment returns, etc.
Damn Millennial
Hi Paula,
Thanks for the response. The financing aside as I would not be doing a house hack in the multi family what are your thoughts? For instance if you had 200K today in cash to invest in this market (realizing real estate is local) we are experiencing would you A.)Invest in a smaller deal or B.) Save and wait for a larger deal where economies of scale come into play. From the education I have gathered it sounds like many in SFH succeeded because of timing but the long term play would be larger multi families (if you can find a deal).
DM
Paula Pant
Personally, I’d invest in a smaller deal so that you can start earning returns / collecting cash flow / learning and sharpening your skills immediately. You can always scale up to a larger building later by selling your holdings and using a 1031 exchange to make the transaction tax-deferred. 🙂
Damn Millennial
Thanks for your input!
topseekrit
I was running numbers while listening to this podcast and it made me realized I conflated insurance and taxes! My numbers look a bit better 😉
Great episode!