fortune_p_dawg: So, I've bought houses before, one for $27,000 and one for $53,000. Big old brick houses that work great as rentals but not really places you'd want to raise a family; civil war era type stuff that just so happens to be in a poopy neighborhood. I picked these up when I was single and getting married and having a kids was the last thing on my mind, I had nothing to lose and figured it'd be fun and cheap for a single guy. Since we've been married and had kids either lived in one of these old beaters or rented in a nicer neighborhood as I always thought my credit line was pretty much exhausted (i support a family of 4 and take care of my two rentals).

Well... a few weeks ago my wife and I went house hunting and sorta-kinda fell in love with one of the first ones we looked at. It needs some fresh paint and some updated appliances, the deck out back needs to be stained but it's roomy has a finished basement. They wanted $130,000, we made an offer at $110,000, and we settled at $116,000 plus about $2000 of light repair work. The bank approved my loan and everything; I was like "WTF, lol okay."

Yesterday at work I freak out, call my agent, call my wife, tell them the deal is off and that I can't handle the risk of buying a new house for that much when I have rentals that could go vacant at any time (they're NOT currently vacant). I started Googling foreclosure horror stories, probably the WORST thing I could do. We're about a week and half away from closing on the deal, and I get all parties completely bent out of shape because I got a nasty case of cold feet.

I called my agent today and told him the deal is back on as I had to sleep on it and talk to my wife (who was pissed, lol). I feel mostly better today but this is like the biggest responsibility I've ever taken on, plus I'm afraid to buy any games on here until I close on the deal (need GOG therapy).

Words of encouragement needed! O_o

fortune_p_dawg: *snip*

HereForTheBeer: Words of encouragement? Bwaahahhahahhhaahaha!

Scared me shitless, too, both times, and at a similar price level. STILL scares me a bit since my income varies a lot from month to month. To make it worse, we bought two country lots last year and would like to build our final home sometime in the next 3-5 years. Buying the lots was bad enough, even though they were relatively cheap ($31.5k for both, 3.22 acres total), but building is probably going to be the death of me.

Still carrying mortgages on your rental properties? Maybe one way to alleviate some anxiety is to pay off the smallest mortgage; that will give you some breathing room should it sit empty for a couple months.

As a landlord I bet you have a good handle on dealing with the problems that can crop up on a home. That in itself is a huge plus in your favor.

Congrats on the home, and good luck with the whole thing. Take a deep breath, relax, and be sure to buy the title insurance.

fortune_p_dawg: Yeah, I still carry mortgages on my rentals but I have them paid down a little over half each. I'd say between the two of them I owe about $52,000, which isn't nearly as bad when I actually see it in writing like that. Need to get those fuckers paid off! Lol!

mrkgnao: I hear you. My wife and I (no kids, nor will there be) are also looking at buying. Frightening.
Just to put things in perspective, though, we live in Silicon Valley, CA. We are looking for a condo or townhouse, probably two bedrooms, 1,000 square feet. At the moment we are unable to find anything in our limited price range, which is...
... $450,000.
So for me, at $116,000, I'd buy two.
Where are you in the US?

As for encouragement. From my experience, having bought previously (but not in the US), after a panic cancellation or two (we've all had them, or at least thought of them), you get used to the idea. You may have lost this house; there are going to be others. You'll end up finding one that is better. And in years from now, you'll congratulate yourself for not buying that first one, for you ended up with the one you really love.

HereForTheBeer: Gonna guess that the smaller one is around $300 per month, not counting the escrow account. If you can swing knocking that sucker out and then putting it into the other rental mortgage, I bet you'll be clear in fairly short order.

That said, some "institutional" landlords recommend the opposite, using the bank's money to make you money. However, these are also people who are constantly buying more properties and aren't sticking with just a small portfolio of two or three houses. Ultimately it depends on things like the interest rate you're carrying and your comfort level of carrying the debt load. Myself? I'd try to keep it simple, but would also consult with an accountant at $50 - $100 for some professional sit-down advice.

blotunga: I also wanted a house, but after checking offer/prices for 3 years, I gave up. They are freaking expensive in the city. So I've settled for a 100sqm apartment (that's 1050 sqft). No mortgage though as I hate debt. Btw. what's wrong with brick houses? Here almost everyone who builds a house does it with bricks.

fortune_p_dawg: So, I've bought houses before, one for $27,000 and one for $53,000

lukaszthegreat: .....
thats really low price for a house. you can't get a land for under 50 grand in australia (unless i guess its in the middle of the desert)

what kind of 'houses' did you get for those prices?

F1ach: Dunno much about the market there, but compared to here those houses are cheap, 4 bed semi detached is about €350K here. Because a lot of builders here went bust, there are relatively few houses being built, so property prices are rising slightly after a major bubble burst (a few years ago 4 bed semi was around €450k) and the rental market is picking up significantly due to the housing shortage.

I don't know anything about rental income there but I have 2 houses, basically 2 X 4 bed semi's joined together, I rent out one. If your two rental properties can cover all your mortgage repayments, there should be no worries. But, if you are stretched meeting repayments on all three houses in the current climate, maybe an option would be to sell one of the rentals to soften your exposure.

Yeah, what's wrong with brick houses, unless you are implying their age by that description?