So I just got a job offer to move to a city 4 hours away for the same company; long story short, its a no brainer move for a lot of reasons. The only downside is I need to start the next job in <2 weeks and currently own a house.
The pertinents:
Approx 115k left on the mortgage
I overpayed for the house at 151k, with a 30k downpayment (121k original mortgage) and it would likely sell on the market for $145
So I have 14 years left, payment is 806. (15yr, 2.5%)
I have a garage apartment with a renter that pays me $500 a month but I pay his utilites since the house/apt are piped together for electric/gas/water.
I had the house looked at today by friend of a friend who says she can rent out the main house for probably $1000. She will provide a "good" renter for 75% of the first month's payment. She will also manage the renter for 10% if I want. The house has new heating/air/roof, and is generally in great shape. Alternatively, I trust my renter in the Garage Apt (old owner's son) and could probably get him to manage the place in exchange fore knocking $100 of his rent.
Question 1: Rent or Sell. My initial instinct is to keep it with the ability to pull 2 rents and the house being in good shape.
Question 2: Do I put this under a LLC, or incorporate in some form/fashion. Any suggestions on where to learn more about this?
I've been playing with the idea of getting into the rental business for awhile, but wasn't necessarily looking to rent my own house. That being said, not that I'm moving I have this idea that it might be worth trying to buy a multi-unit and then owner occupy it. I found two adjacent properties from the same seller at the new job site. I'm going to look at them this weekend. I got the "pro forma" from the seller, and thought you guys might advise. There is a Triplex/Quadplex. They are houses that have been converted over. I've attached the Combined Pro-Formas, along with my own house written up in a similar fashion. The triplex is selling for 100k and the quadplex for 135k. Structurally they look decent from the pictures but the apartments are definitely very dated and haven't been updated in a long long time.
Heres what I have to work with; assuming I get a decent moving allowance I'll have 35k in cash/taxable stocks (including the emergency fund). Which to my mind is enough for a 20% down on either of the apt's, and allows me to keep a emergency fund. If its worth it to try and buy both at the same time, I might be able to buy the second under contract/seller finance/another creative method. I may also have the opportunity to solicit friends/family for a business investment. If I do solicit money I want to make sure its strictly as a business deal, not a friend helping a friend kind of thing.
I have no other debt and gross 73k, but have a take home pay of about $700 a week after maxing out my 401k. I live frugally, but probably not quite up to the level that the MMM community strives towards. (I'm new to this and accept that I enjoy a few vices enough to work a few more years).
Questions 3-6
3. Do these properties even perk the experienced eyes here?
4.What is the current interest rate/term for rental loans?
5. Has anyone gone the route of using a self directed IRA to invest in rental property? Is this a feasible/worthwhile endeavor. I don't mean pull it out of the IRA, I mean have the IRA actually own part/all of the business. This would allow me access to another 45k.
6. I have a higher risk tolerance (I'm 26), if the reward is worth it... but is this setting off alarm bells for anyone? My thought is I move into one of these apartments and save up cash, for a downpayment for a house that I actually want to live in, though I probably should also set aside money to update these apartments.
Alternatively the other option is to take the pressure down a notch, rent my current place, put my stuff in storage, and then rent a place for 6 months till I have a better idea what I should do. This is the default plan if these two places fall through/ or I arent worth the effort. I just think the idea of pulling stock out of the market right now and investing in real estate while interest rates are so low seems like a good move.
I'm open to any thoughts/opinions/criticisms. Thanks for reading.