I am writing to get your thoughts and ideas on the subject of when is the best time to get started on this amazing real estate journey.
I have been wanted to start building real estate rental portfolio for 10 years, and every time some thing happens in life that prevents me from starting. We live in CA where homes are expensive. We are planning on moving closer to my wife's family in LA and purchase our home there in 18 months. However, I am tired of waiting and I feel like I will never get going on this dream. We could invest in a rental home in the 200-250K range right now if there is a great deal with 3-4 hours of LA. Would you wait and buy the primary family home first before investing in a rental property if a great opportunity arises?
Hope my question makes sense!
Thank you bros and sisters!
Good evening Augustin,
I'm not familiar with your market but I'd recommend house hacking. You'd live in a unit and rent out the other unit(s). You're still going to have to pay mortgage (or at least a portion of it), why not have a tenant help you out???...
Primary residences are liabilities- no income, all expenses.
Multi-family may not be your only option, single family could work... if you find a primary residence thats in an up and coming area and needs some work, you could have yourself a deal. Of course, these "good deals" usually don't even reach the MLS and/or go to cash investors. I'd recommend getting in contact with brokers and wholesalers in your areas of interest to get a clearer picture.
Best of luck to you!
I would do what Abel is suggesting. especially since it will force you to buy a quality property, because you don’t want to live in a dump in a bad part of town. You’re tenants will usually be better and give you less headache as well.
House hack if you can. Remote managing one home 3-4 hours away for a couple $100 is going to be a nightmare.
The first thing I noticed, is that you said you have been wanting to invest for 10 years.
If you wait for the stars to completely line up, you will be still waiting 10 years from now.
My viewpoint is to find the best deal you can, that fits you now. Then find the next one, the next one. Imagine if you would have started 8-9 years ago.
Now with that said, I am in a lower real estate market. The way prices have heated up in California, yes it would concern me, but if you find a great deal on a good property, you should be ok. You make your money when you buy the property, then you let your renters pay it down, which is lowering your risk, as they pay off your mortgage.
You can't learn to swim if you do not get in the water, start analyzing deals and get started.
I'm all for doing investment properties over and/or before a primary home! Here's why-
Hope that helps!
Thank you all for your thoughts! That is wonderful feedback!
I agree with most points. We live in Santa Barbara and rent here because my wife has an employment contract and we plan on moving closer to her family in LA once the contract is over, and that is 18 months from now. I have been reading trying to educate myself, listening to podcasts as well. I need to find real estate investment clubs near me and start networking with other investors. I definitely feel like now it is the time to get started and build some momentum. I also got pre-approved by my bank.
The idea behind looking 3 hours outside on LA is because with my price range we won't find anything in LA. I would even consider going out of state but that is very risky for the first investment.
I agree that the primary home is not an investment, not an asset, it is actually a liability which cost you money monthly and brings in not cash flow. The point of the home is living in a great area where kids can be raised and attend great schools. Plus, it is better than renting.
Househacking is an option, but my family is quite large. My parents will be living with us. Plus I work from home so we need at least 4-5 bedrooms. I saw some deals where there 2 homes on the lot and you can live in one while renting the other, most of theses properties only have 3 bedrooms max. So I feel like that won't work.
The other hurdle I am facing is that my partner share my excitement about real estate investing in general but she does not support my idea of starting to invest even before behind our primary residence.