“Advance To Go” Monopoly & Real Estate
Just like there are many ways to skin a cat and in buying investment homes there is more than one way to “Advance To Go” and accumulate cash. One of our house rules of Monopoly is that you can’t purchase properties until it’s your second time around the board (it’s a thing, look it up). Since it’s our second blog we thought we’d talk more about buying strategies with your $30K.
Park Place Strategy: Our Park Place Strategy is to buy a single family or two-family home for the optimal $30K and start earning revenue. Like Park Place in Monopoly, we’re assuming an opportunity to buy this property has not left you much cash to acquire another home in the short term, but steady rent should put you on a path to be able to purchase your second home.
Connecticut Avenue Strategy: Our Connecticut Avenue Strategy is rooted in the idea of using your $30K investment to buy multiple homes. While it is not easy to find lenders that write mortgage loans under $50K, it can be done at certain credit unions and banks. Funding aside, the current Cleveland real estate market dynamics allow potential investors to purchase a rent ready multi-family and/or single family home for $40K. If we assume a required 25% down payment at $40K for each investment property, then the down payment for all three homes will be $30K or $10K per home.
Fact: In Ohio, you’re allowed to have up to four mortgages in one person’s name
Baltic Avenue Strategy: Let’s be honest, as the cheapest property in the board game, Baltic Avenue is not the sexiest property in Monopoly but we have all lost to that person who was thinking “cash is king” (save money) and manages to also buy Mediterranean Avenue and build homes and accumulate cash quicker than any of us playing the game. Our Baltic Avenue Strategy is primarily based on the premise of you becoming an owner-occupant of one of the multiple homes you buy to take advantage of having a minimum down payment of 3.5% compared to 25% as an investor. Hypothetically, you would only have to put down $1.5K on a $50K mortgage loan and can move out in one year, if you choose. What do you do with the other $28.5K? Perhaps, save another $1.5K and do our Connecticut Avenue Strategy or only get a loan for one more home and relish the opportunity to have more cash readily available for property expenses. The bottom line is that there are a multitude of ways to “Advance to Go” and we hope you don’t take longer than that drawn-out Saturday night game of Monopoly with siblings who cheat or make up rules (we all have at least one in the family). Good luck and talk to you soon!
Helpful Link: HOW TO FIND SMALL HOME LOANS UNDER $50K