Buying first property!

14 Replies

I am looking into buying a personal residence but also looking into buying an investment rental property within a year from now as well. 

For my personal residence, I was looking into doing buying a foreclosure with a 203(k) loan, doing some value add, living in it for a year and then maybe finding another residence, and then renting that property out. 

But I would like to buy a rental duplex or triplex as well within the year, is there any suggestions to do both of these deals within the year? How would you all going about doing this if it were you? I am just trying to get a rough game plan together. 

So after those two deals, I would have my personal residence, and then 3 doors of rental properties in my portfolio. Just need some light shed on the best way to get started.

I would use the 203(k) to buy the duplex or threeplex. Live in one of the units, then buy your personal residents.

The multifamily asset is the best of the options you presented.

Depends on your situation.

@Al Williamson is correct that the duplex or triplex would be the best starting point, unless that does not work, such as wife refuses to live in it or too large of a family.  

If it is only you or you and spouse- try the multi unit first. Then move up into a SFR for yourself.

A friend of mine just bought a great home, with a duplex in the back.  He purchased it because most buyers do not want the duplex, so he got a steal.  The House itself was worth what he paid, but he got the duplex also.  (granted the duplex is currently empty and he is redoing it).  It is going to cost him about 20k to fix the duplex and it will provide him with $1200 month income.  His mortgage isn't but 1500 piti.

What I am saying look for the bargain, you will find it.  

It had belonged to an older couple who was friends with this guys Dad.  The lady had passed away and the man was going into a nursing home.  The kids wanted rid of it.  Right place, Right time, with a contact.

I drive neighborhoods I already own in.  I look at the tax roles and look for out of state owners.  I try to eat breakfast every morning at one or the other diners in town.  I discuss with friends and acquaintances.   Neighbors see me or my crew fixing properties.  Tax Sales and REOs are my bread and butter.

Originally posted by @Al Williamson :

I would use the 203(k) to buy the duplex or threeplex. Live in one of the units, then buy your personal residents.

The multifamily asset is the best of the options you presented.

Is there any way to go about buying a personal residence and a rental property? I am looking for a MFH rental and then a SFH for my family.

Either way I will be able to get the 203(k) for the house I live in and then have to do a conventional at 20% down or whatever for the rental? 

Or should I just start with one and acquire the other later on with other ways of financing? Ideally if I get a SFH I would like to acquire the rental to offset my living costs (other than my work income of course). So I think I am stuck with the 3.5 on one, and 20 on the other right?

Thanks!

@Garison Clemens Did you ever get any clarity on what the way to go about this is? I am literally in your same situation and I'm not sure everyone exactly understands the question I'm asking. Or maybe I'm asking for too much of a detailed plan.

I'm in the Orlando area and was really trying to find a MFH while it's just myself, my girlfriend, and our cat. But everything that would be in my price range of around $300k or less is just not great. They're usually too small or not in the best area. I've only been searching for around a month but it still doesn't look great unless you're ready to pay closer to $500k. And even those homes are rare.

So I've began to consider just doing my SFH home first and then my first rental later. The suggestion I got from my agent and will likely take is to purchase one of these just under my name and my girlfriend purchases the other. I make a little more so I'll likely get our SFH. This is to help a little bit creditwise but I'm also considering our SFH first because of certain programs that I would miss out on otherwise. One in particular for Orange County basically gives you a ridiculously good loan on $15k to use as a down payment. I forget all the fine details but it has a low interest rate and is forgiven after 5 years.

But where I'm stuck is where to go from there. After I get our SFH, then we can save up a little so we have 20% for the rental, but then I don't know what to do. I know we would then have to save up 20% again for rental #2 but what I don't quite understand is how much time, credit, or equity we would have to build in our respective first purchases before we are able to each get our second.

To add to my last post, if you really do seem set on MFH to make income right away you can also consider looking for homes with detached apartments or in-law suites. Not all of these will show up when  you do a MFH search on Zillow, Trulia, etc. So I've looked for keywords like in-law, apartment, detached, or looked for homes zoned R-2. You have to be careful with these though. I found a home I fell in love with in a good area, decent price, really nice 1/1 in-law suite BUT it was built 30 years ago without proper zoning so it can probably be used as an actual in-law suite without a problem but would need to be rezoned in order to be rented out legally to a tenant. 

Originally posted by @Yader Gomez :

@Garison Clemens Did you ever get any clarity on what the way to go about this is? I am literally in your same situation and I'm not sure everyone exactly understands the question I'm asking. Or maybe I'm asking for too much of a detailed plan.

I'm in the Orlando area and was really trying to find a MFH while it's just myself, my girlfriend, and our cat. But everything that would be in my price range of around $300k or less is just not great. They're usually too small or not in the best area. I've only been searching for around a month but it still doesn't look great unless you're ready to pay closer to $500k. And even those homes are rare.

So I've began to consider just doing my SFH home first and then my first rental later. The suggestion I got from my agent and will likely take is to purchase one of these just under my name and my girlfriend purchases the other. I make a little more so I'll likely get our SFH. This is to help a little bit creditwise but I'm also considering our SFH first because of certain programs that I would miss out on otherwise. One in particular for Orange County basically gives you a ridiculously good loan on $15k to use as a down payment. I forget all the fine details but it has a low interest rate and is forgiven after 5 years.

But where I'm stuck is where to go from there. After I get our SFH, then we can save up a little so we have 20% for the rental, but then I don't know what to do. I know we would then have to save up 20% again for rental #2 but what I don't quite understand is how much time, credit, or equity we would have to build in our respective first purchases before we are able to each get our second.

 I am still having trouble but I'm not going to rush anything. 

I definitely will be on the lookout and it just takes patience sometimes and I'm definitely learning that very quickly! I am looking to get a deal under my belt but through everybody's advice is really do not rush because it could cost you tremendously.