Struggling to find a property and move, but great opportunities.

bySwangirl

5.4K followers

7 years ago

I have not had time or energy to say hi this week. I want to give my buddies here a quick update though. We are still looking for a multi-unit property to buy. We are trying to find a good tri-plex or four-plex since that would be a best return on investment here. We would not be able to do this without my husband's veteran's administration (VA) loan. I am so glad we kept it and did not use it to buy a house! A house would be nice but houses are so expensive here, all our money would go to the mortgage and utilities. We would be "house poor". If we buy a multi unit property we will be able to live almost rent free! It could save us $1800 per month from what we pay now in rent and utilities! That would be huge. It will make us less than that once we move out (and no longer benefit from the savings in rent and utilities), but still a profit.

We are only doing this because the landlords decided to move back in since their kids are grown now and they miss the location. So we have until April to get out. Since we have to move anyway, it makes sense to take advantage of the low interest rates that will soon be rising. With the VA loan we could buy one of these properties for no down payment and pay no mortgage insurance. So this is truly a once in a lifetime opportunity.

The problem is finding the right property! Buy one with hidden damage and you suddenly end up losing money. Buy one in the wrong neighborhood and worry about crime. It has to make money, be in good condition (the VA will not give you a loan on fixer uppers), and in our case be a property we can live in ourselves! This means ideally no stairs due to my bursitis and tendonitis. That is difficult as you can imagine as most multi-units have stairs. However, I am finding a few ways to improve my mobility and maybe the stairs won't be such a big deal. If this was our permanent home I could not really take that chance though. We wouldn't want a 30 year mortgage on a place I could not live in. Luckily, the mortgage lender and the realtor we are using are helping us follow a plan so we would only live in this building for a year. They are part of a real estate investment group here (and have their own mortgage company and real estate company respectively). They are so good at what they do, they often travel out of state to teach other brokerages their methods. They helped Mom refinance her properties and she goes to their real estate investment classes here each month. She recommended them to us and we are sooooo glad she did.

So the idea is you find a place with the VA loan, live in it for a year while saving up and then have enough for a down payment in another property using an FHA loan where you only have to put 3.5% down. The second place may be a duplex for example and then you live in that. So, we need to not worry too much about our preferences for this first property. It needs to make money first and foremost and of course be well maintained and in good repair. Their plan involves holding on to these properties long term so this is not flipping.

So on the one hand I need to stop worrying about the type of place I want to live in since it is only for a year and the long term rentability is more important. However, we would keep the properties as investments...therefore I want them to be something I am really comfortable with. For example we looked at one that is in great shape and very clean and well maintained but it is 20 miles away...I don't know where we will end up but it would be better to have something close. One tri-plex we looked at was great...until we talked to the tenants and learned of some problems like windows blowing out!! All the windows would need to be replaced. Doable, but certainly worth considering as well as mold on the bathroom ceiling, ice damming on the roof (though it is a BRAND NEW roof only 6 months old so it must have ventilation and insulation issues), tenants upstairs complaining about tenants downstairs smoking pot...uggg. We could use a state program that encourages energy efficiency to get repaid for replacing windows and insulating roof.

I am also sick again and just started on a new course of antibiotics so it feels especially daunting. I have no leave left from work either...what timing.

I am trying not to panic at the thought of all the hassles we may end up with. If it makes enough money we just need to deal with them as they come. This could be our lucky break and if we find a good place we will be so glad we took this chance to gain a second stream of income. The rent coming in from the unit we vacate at the end of the year and the rent from the other half of a duplex should pay the mortgage on the duplex so we would live rent free there as well.

I hope you are all doing well!

Jessica