Leading up to the purchase of my house I had several plans for the future. 

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Basic Details 

• December of 2013, (37 months ago)
• $78,000 (now owe 74,800)
• @ 4.125%
• 1,083 sq ft
• 3 bed, 2 bath

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The #1 Plan
House was to be lived in for one year while improving the interior and landscaping – expecting to use ten to fifteen grand to complete the rehab. Most of the money would be spent on materials – aiming to do much of the installation myself. 

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Keep working at the current job for a couple years at the same (or better) income, while also renting my investment property to strangers.

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The total cost of rebuilding would come out of my pocket over six months time. I had around 1,500 worth of disposable income each month with 3 day weekends! Time, budget, and *physical performance were all peaking about that time.

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The investment would have been wonderful like that. I could have already earned an easy 300/mo of income for two years (300 x 24 = 7,200). This would be reinvested into dividend stocks. 

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The plan continued as: save up around 21,000 (30% down payment for a 70k mortgage). Find a nice deal again and repeat, but without living there again. This 20k would have taken around a year and a half at most. Then rinse & repeat – speeding the down payment savings time with each additional house. 

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Plan #2
Once the house is remodeled after around one year, I planned to rent room(s). Offering rooms as weekly or monthly – aiming for contractors like myself. There are two smaller rooms and a master (private bath) that I would rent for 400-600 per month. This is well known as house-hacking these days. This would/could have paid for all of my housing costs. 

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That situation could have gone on for two and a half years; when my contract was to expire. If I were to have one roommate for 500/mo (2.5 x 12 x 500 = 15k).  As the contract neared the end, I could sell it (or rent it) to a family while looking for the next job prospect. 

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Plan #3
Same remodeling over one year and renting rooms – but aiming for a 2nd house quicker. By end of year two, having already had the 6k from rent throughout the year & 1k/mo savings, my cash pile would be at ~ $18.

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Appreciation over two years should have been around ten grand. And there’s the ten thousand in upgrades during the first year. That is 20k if I sell. 

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With a grand total of 38k, I could: 

• put down 42.2% of 90k on a new house (with no repairs required) to immediately rent out for around 800/mo. Payments would be around 450, pulling 350 profit per month. 
• put down 30% of 126k on a two-unit house. Payment of around 700, but each unit would rent for 700 each. 700/mo cashflow (8,400/yr). 
• put down 31.5% of 60k for 2 houses in a lesser neighborhood where rents may reach as low as 500/mo, but 650 is common, and 850 is possible. Two loans at 41k each have payments of $355, totaling 710/mo. Profit could range 300 – 950 (3,600 – 11,400 per year). Likely ~ 7k/yr. 

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Plan #4

Same as #3 – up to the bullets. I would cash out with 38k. Drop out of real estate until I feel settled into an area. Live as a nomad contractor and toss 30k straight into a range of dividend stocks. And begin to toss in all my extra savings into that. 
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Plan 5  — errr REALITY

Plan failed. Laid off from the position, six months after purchase. Tossing me directly down a different path. Without a replacement job for an extended time and other twists of fate, my plans were slowed. 

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But now, it appears that my house value may be as high as 110-120k (assuming it is fixed). If sold, that’s around 20-30k for my pocket. That could go a long ways to fix my cashflow. 

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I have only need for a few thousand for appliance replacement and miscellaneous items. 

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So, I had written all that after a rough few days and had a mind to sell the house. This was February 2nd, I believe. I’ve changed my mind, for now, on selling. But I still entertain the possibility. The main point for now is to get the house in livable condition and then see which path feels appropriate. And pursue it. 

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* I had just been through a crazy year in which I had recently lost a massive chunk of weight and had been biking many miles each week. 

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2_22_2017 Wednesday, 9:20pm