Posted by Kim in Kansas City on January 22, 2008 at 10:48:45:
Boy I had a great reply but forgot to hit post. let’s see if I can repeat it.
First - what will a dream home do for you now but give you shelter, while you come out of pocket a few hundred a month to cover the mortgage less rents on your current home.
So stay put.
You are also sitting on a 15 year interest only loan, so you are gaining no ground. Refinance and use some of the $140,000 to pay down to an amortizing 30 year fixed loan. Then maybe rent it out in a year or two down the road as you will have a much lower mortgage payment.
Now that leaves you with $100,000 to do something with.
All the experts say, build up a rainy day fund in case you are sick and can’t do deals or in case a great deal comes along and you want a down payment or something. But I would probably go house poor and invest it all myself.
Some investment ideas.
Here in our market and many midwestern markest you can buy a very nice house from between $89,000 to $100,000 and have it cash flow, go to the urban core and buy, fix up, ,and rent and you can buy for about 70 cents on the dollar.
So take your $100,000 and buy 10 houses that will bring in at least $200 a month in cash flow, that pockets you $2000 a month or $24,000 a year - great part time job . . . Plus its a down market and the proeprties will appreciate . . . more income
Idea 2. Buy into a small multi family property that will cash flow.
Idea 3. Become a private lender and earn 10, 12, 15 % interest passivly
Idea 4 Become a hard money lender and earn 15 % interest and 5 points.
just some ideas . . .