Best Way to Start Out
All,
I'm new to the forum and have been doing lots of reading and talking with friends/coworkers that have already begun their real estate investments. I'm looking to do the same within the next year. I'm 23 and make a very good salary but I have moved around for the past 2 years. I'm now settled in OKC and will be here to stay for a while, at least a few years. I'm currently renting a house with 2 buddies. After next August, I'll have somewhere around $30k to invest with. I could have substantially more if I have liquidate some stock investments and reduce how much I contribute to those. The current lease is up in September of next year. I see a few options and I'm trying to understand which route is the smartest.
- Don't buy anything until September, try to save up for a conventional 20% loan and buy my first primary residence. I would look in the $225-$325k range. I would have to liquidate some assets but that would be acceptable to me as I would buy a 3-4 bedroom and rent out the extra rooms. A few of my buddies currently do this and it works out well. I would then continue saving until I can afford 20% on future investment properties. I would likely start with much cheaper homes- <$100k. I also have a friend who is very serious about this as well and is interested in going in together.
- Do the same as the scenario above but instead of a conventional loan, put 3.5% and go the FHA route. I like this option as it leaves substantial cash and I could buy 2-3 rental properties with 20% down conventionally quickly (I'd start with 1 for 3-6 months). I would live in this house for at least 12-24 months as it's required before I could move out and rent it out.
- Don't buy my own house yet and focus on acquiring a few income properties first. If I don't buy a primary residence, a buddy of mine will and I could have very cheap rent (~$600/month). However, I do see a house of primary residence in my relatively near future 1-5 years unless I move cities/change jobs before then. I haven't done any serious calculations with this, but it would take a fair amount of time to save enough for 20% if I were to go conventional on primary residence.
Any insight is greatly appreciated. I look forward to reading and learning more from all of y'all on BP.
Scott