Should I invest in real estate.....here's my portfolio

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tmslcs52501
Posts: 2
Joined: Thu May 18, 2017 8:42 pm

Should I invest in real estate.....here's my portfolio

Postby tmslcs52501 » Thu May 18, 2017 8:54 pm

I am really interested in investing in real estate, primarily for rental income. I currently have 1/4 of a condo in Jacksonville, FL that we have owned and rented out for 12 yrs now. I am looking to buy a condo in Myrtle Beach, SC for up to 100k max. Here's my portfolio now. If you were me, would you take this investment risk?

42 yrs old, wife 38

retirement assets:
- 305k current 401k (contribute 16% of salary....about $630 every 2 weeks)
- 90k in Trad IRA
- 65k wife's Trad IRA (contribute $150/mth)
- 27k in 529 plans (contribute $100/mth)
- 75k in cash (in credit union earning .50%)

Liabilities
- owe 164k on mortgage (home worth about 300k)
- pay $200 per month for jacksonville condo (mortgage/hoa fees)
- owe on 2 cars (about 15k total)
- no credit card debt except monthly expenses, paid off in full each month

Credit score around 800+

Married 2 kids ages 8 & 12

I want to buy a condo to diversify away from the stock market. What is a good option for me? Knowing some of my situation, would you invest in a condo for rental income?

Thanks in advance for your opinions/ideas.

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Bogle_Feet
Posts: 779
Joined: Tue Jan 14, 2014 6:56 pm

Re: Should I invest in real estate.....here's my portfolio

Postby Bogle_Feet » Fri May 19, 2017 4:49 am

Nothing like paying higher taxes with real estate!
https://blog.wealthfront.com/tax-effici ... investing/

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BeBH65
Posts: 711
Joined: Sat Jul 04, 2015 7:28 am

Re: Should I invest in real estate.....here's my portfolio

Postby BeBH65 » Fri May 19, 2017 5:17 am

Hello tmslcs,


Some questions to help you in your reflection?

What is the value of the condo? What is the income that you derive from that? And after you subtracted the costs? Are you happy with that? What return are you looking at for the new property?

Looking at this:
tmslcs52501 wrote:retirement assets:
- 305k current 401k (contribute 16% of salary....about $630 every 2 weeks)
- 90k in Trad IRA
- 65k wife's Trad IRA (contribute $150/mth)
- 27k in 529 plans (contribute $100/mth)
- 75k in cash (in credit union earning .50%)
...
- owe 164k on mortgage (home worth about 300k)
it looks like about 20% of your net worth is now invested in real estate, not counting your condo. Do you want to make that higher? How is your split equity/bonds?
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

tmslcs52501
Posts: 2
Joined: Thu May 18, 2017 8:42 pm

Re: Should I invest in real estate.....here's my portfolio

Postby tmslcs52501 » Fri May 19, 2017 5:13 pm

The condo I co-own in FL is worth about 90k now (zillow estimate), we bought it for 133k in 2006. We see no profit each year and I really don't even think of it as a real estate investment since I only own 25% of the place and it's not worth much to begin with. We have a renter paying us $800 month, but we have a 30 yr mortgage (we refi during 2014 and have 27 yrs left).

As far as myself investing in real estate, I'm looking to buy a condo for 70-90k, put a 30-40k down payment and rent it out. I would like to be cash positive each month for starters (which we're not now in our FL condo). I'd like to take in at least $250-$300 net each month after expenses).

Ostentatious
Posts: 168
Joined: Fri Aug 15, 2014 6:34 pm

Re: Should I invest in real estate.....here's my portfolio

Postby Ostentatious » Fri May 19, 2017 6:17 pm

Head to biggerpockets dot com for more information from like-minded real estate investors. Over here, you will hear all the worst case scenarios.

CppCoder
Posts: 374
Joined: Sat Jan 23, 2016 9:16 pm

Re: Should I invest in real estate.....here's my portfolio

Postby CppCoder » Fri May 19, 2017 8:12 pm

tmslcs52501 wrote:The condo I co-own in FL is worth about 90k now (zillow estimate), we bought it for 133k in 2006. We see no profit each year and I really don't even think of it as a real estate investment since I only own 25% of the place and it's not worth much to begin with. We have a renter paying us $800 month, but we have a 30 yr mortgage (we refi during 2014 and have 27 yrs left).

As far as myself investing in real estate, I'm looking to buy a condo for 70-90k, put a 30-40k down payment and rent it out. I would like to be cash positive each month for starters (which we're not now in our FL condo). I'd like to take in at least $250-$300 net each month after expenses).


So you currently own (part of) a condo on which you have lost principal and have negative cash flow, and you are asking a financially conservative investment community if you should double down? Uh, my vote is no.


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