Phoenix, AZ · Member since 2015 · 7 posts · 0 votes
Hi,
I am struggling with whether I should purchase my own home first or an investment property. I am from the east coast, but I've lived in Phoenix, AZ for almost 5 years. I don't plan to live in Phoenix for the remainder of my adult life however, I do believe there are great opportunities here for investment properties.
What are the benefits and disadvantages of each? I want to make an educated decision. I have done research, but I'd also like to get feedback from the experts here!
Real Estate Agent · Scottsdale, AZ · Member since 2016 · 65 posts · 24 votes
9y
@Chelsey RichardsonI think if you buy a property as an investment (buy below market value, generate cashflow, appreciation, etc.) it would be fine you choose to live in it rather than renting it out. Assuming you are currently renting, you will be putting your rental expense into your own equity rather than your landlords equity.
So that said, buying your own home and living in it is an investments in itself. But rather than buying it for yourself based on its charm, style, etc., buy it based on its good investment potential.
Phoenix, AZ · Member since 2015 · 7 posts · 0 votes
9y
I apologize for not being clear. Buying my first property to rent out solely to tenants, not an owner occupied property. I am not fond of the idea of buying a SFH or duplex, for that matter, and renting it out to tenants as well.
Investor · Phoenix, AZ · Member since 2015 · 346 posts · 170 votes
9y
Understanding what you want is the first step. What's your goal to be in real estate? Financial freedom? You want to manage properties? You want cash flow? Passive income?
What do you like to be doing in real estate?Read about how other people have achieved what you want to achieve in real estate and you can start from how they started. Read the benefits and the disadvantages of owning properties.
That's what I can tell you.
Phoenix, AZ · Member since 2015 · 7 posts · 0 votes
9y
I want to obtain financial freedom and cash flow, but long term residual income as well. I have researched for the last few months however, I was hoping to learn more from some of the gurus here as well. How did you get started in real estate, if you don't mind me inquiring? I'm just a sponge. I'd like to soak up as much as I can.
Real Estate Agent · Scottsdale, AZ · Member since 2016 · 65 posts · 24 votes
9y
@Chelsey RichardsonI think if you buy a property as an investment (buy below market value, generate cashflow, appreciation, etc.) it would be fine you choose to live in it rather than renting it out. Assuming you are currently renting, you will be putting your rental expense into your own equity rather than your landlords equity.
So that said, buying your own home and living in it is an investments in itself. But rather than buying it for yourself based on its charm, style, etc., buy it based on its good investment potential.
Atlanta, GA · Member since 2015 · 40 posts · 4 votes
9y
@Carlos Gonzalez I'm trying to get me a duplex or fourplex and from what I see it's best to go the fha route. I was on my way to getting my credit score into the 600s. My question is do you know what the lowest your score can be to get loan for a multifamily property and what are some good companies to go through that might consider a score slightly under 600.
Rental Property Investor · Phoenix AZ / Kendallville, IN · Member since 2016 · 293 posts · 149 votes
9y
What you might do is house hack. Buy a duplex, live in one unit and rent out the other. You could also do this in a single family home by renting out a room or two.
Unfortunately Phoenix is a very hot market right now. You would be better off doing something like this in the midwest where the RE is cheaper for a starter investment.
Real Estate Agent · Scottsdale, AZ · Member since 2016 · 65 posts · 24 votes
9y
@Chelsey RichardsonYou've found the right place! Keep up with reading the forums and definitely listen to all the podcasts. Really educational info on here.
Another way to go about it would be to buy a duplex, live in one side and collect rent from a tenant on the other side. You likely won't collect enough rent to cover all the expenses but you might take care of more than half the mortgage which would be even better than simply owning you own house.
Realtor · Mesa, AZ · Member since 2014 · 158 posts · 56 votes
9y
@Chelsey Richardson Another option to consider is a live-in flip. If you own and live in your home for 2 out of 5 years you pay no tax on gains up to $250k. This way you can slowly learn about home ownership, rehabbing, design, and what makes a good investment.
Investor · Phoenix, AZ · Member since 2015 · 346 posts · 170 votes
9y
Koritas Jones
FHA is the best route yes. Try different banks and they will lend you money. Go to a credit union first and they'll qualify you in no time assuming you have enough income to make the mortgage payments.
Rental Property Investor · St. Louis, MO · Member since 2013 · 194 posts · 100 votes
9y
Chelsey Richardson FHA lending requirements are set by FHA. I believe it's a minimum of 640 credit score, but not sure on that.
I completely recommend the FHA financed multi family approach. The market here in Phoenix is hot so you screaming deals are hard to find, but they are out there. My client is negotiating on a triplex now that is $60k-$100k under ARV comps.