In August, 2016, my wife and I decided to move our family just a few doors down in our cul-de-sac. Why would anyone do that? Most would assume we upgraded the size or condition of the home, the lot or view was significantly better, or we’re simply gluttons for the punishment of moving. All of those assumptions are wrong. In fact, the house we bought was the exact same floor plan – just mirrored. We did it for the investment.
We bought our last house in the downturn on the cheap. Put in tons of sweat equity and figured we’d live there forever. About 8 years later, I met with a very unique lender, Matt Nockels, who told me about the “5 in 10 Plan”. The plan suggests buying and moving into a new home every two years for ten years and renting the previous property at or above the mortgage. This enables you to build an investment portfolio with renters paying for it. We loved the idea, got pre approved, and then realized we didn’t want to leave our neighborhood… or even our cul-de-sac because we love our neighbors and friends we’ve built here. And that’s when it happened.
My friend and neighbor called me to list his house. We agreed on price and terms and began the purchase process. During the inspection period we found renters for the last house and everything came together nicely. We even used equity from the last house to provide down payment for the new house! I feel like this is a win all the way around because we can now provide a nice home in a wonderful neighborhood to a young family that can’t purchase a home, begin a small real estate investment portfolio, and we can choose our neighbors!
The rental property now cash flows nicely and we’re planning to do it again as soon as we can. If this sounds interesting to you, let me know. I’d be happy to answer your questions and help you get started.