Author Topic: Need Some Mustachian RE Advice  (Read 788 times)

caddywhompus

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Need Some Mustachian RE Advice
« on: July 09, 2015, 02:09:40 PM »
Long time reader, first post.
I currently live in Indiana in a manufactured home. I didn't really want to buy it but my wife did and not many homes were selling in 2011 in our price range. We were just starting out. We had about $31,000 in total debt from our first kid and two financed cars. Now we are debt free except the mortgage. We owe $76,500 and the house is worth about $80,000. We remodeled our second bathroom and are getting ready to remodel the master bath as it needs new tile and vanities. We would like to move into a nicer home closer to work but due to our previous lack of money sense, have very little equity. Plus it is manufactured, but the value seems to be tied well into our neighborhood of stick built homes. The guy across the street rents his same manufactured home for $1000/mo. So what should we do?

Remodel and pay down to about $50k, refinance, and rent?
Remodel and sell?
Pay it off and keep as rental then move?

We both work and save 50% of our income. I qualify for a VA loan which is on this house. We feel like we are in a good position financially, but the lack of certainty in this area is slowing down our progress. What say you?

Zamboni

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Re: Need Some Mustachian RE Advice
« Reply #1 on: July 09, 2015, 02:15:58 PM »
It sounds like a potentially profitable rental. Do you want to educate yourself and be a landlord? Do you have cash for the bathroom remodel? Do you have cash for ongoing rental repairs/vacancy coverage?

Moving closer to work sounds like a winning idea. Have you seriously explored the current market closer to work? Do you have any money in cash for down payment, purchase-related expenses (inspections, fees, etc.)?

caddywhompus

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Re: Need Some Mustachian RE Advice
« Reply #2 on: July 09, 2015, 02:56:50 PM »
I do have aspirations to be in real estate. I am reading about land lording, finding deals, etc. and have been to a seminar (for what it's worth). I have been diverting our 50% savings to the remodeling projects with the exception of our 401k contributions to get us ready for the next step. We have our personal emergency fund of $8k in cash but no money saved for moving expenses, inspections, etc. We aren't in a hurry to move because we want to find the right property for us. Our motivation to remodel was to enjoy our time here instead of the house being a burden to live in. It's only about 15 years old and once remodeled should require very little maintenance. Also, if I rented it I'd save the first several months rent to be used as a maintenance/prop tax/insurance fund. My biggest concern is that many say manufactured housing is not a wise investment. I believe real estate to be part of a good diversified portfolio and I like the idea of having the rental income. On the other hand, I hate the idea of debt, even though leveraged debt can be useful in the right hands. I have investor friends who did very well during the last market downturn.