BiggerPockets

Dustin,


I may have some solutions for you. Contact me [EMAIL REMOVED].

Dustin, even though you and your parents have some money, I always advice young people like you to go into real estate wholesaling first before jumping into rentals.

The reason is pretty simple: with wholesaling, you learn the very valuable skill of being good at finding properties that can be acquired at a steep discount (30% to as much as 70% discount!). The other reason is that rental properties are full of risks and headaches - specially single family homes. I have acquired and kept houses and apartments and the latter is easier to lease, manage and they produce more cashflows with less risks.

When a rental house is vacant, it's vacant 100% so you're paying the rent out of your pocket. A 10 unit apartment on the other hand will still be profitable even with 1 vacancy and depending on how you buy it, can be breakeven even with up to 3 vacant units.

Here's what I would do if I were you:
1. Acquire and wholesale a house - buy it and sell it "as is" for a small wholesale fee of $5,000 to $20,000 (depending on the deal). DO this several times to accumulate, say $100,000 in cash.
2. Find a 10-unit (or bigger) apartment building that already produces cashflow and acquire it using your cash reserves you've built doing wholesaling. Of course you have to buy it right (it should produce 12% cash-on-cash return or more).

Doing #1 and #2 ensures you have ample cash and cashflow.

Hope this helps.