Just graduated college in May relocated to a new city working for a Fortune 500 company with salary. Have been heavily researching real estate and looking to begin first investment soon. Wanted some advice based on my situation what would be a good first real estate investment to began with?
I was thing a single family home to rent out considering long term I want a multi family unit. Should I invest into a single family home? If so how do you begin the financial process with loans & financing. (FHA loan of bank)
Also I was considering buying a lot/land in a promising area to begin investing. Are lots a good investment depending on the community?
Any advice on how to get started and what should be my first investment.
Rental Property Investor · Gulfport, MS · Member since 2018 · 113 posts · 133 votes
7y
@Sebastian Sanders I agree with Sam. If you could find a good duplex or triplex that you can live in and rent out the rest you will be setting yourself up well. You can save more of your income by not having a mortgage payment, and once you eventually move out you will have a nice multi family property in your portfolio. Just make sure you analyze it as a full rental to be sure the numbers work well as an investment after you move out. I definitely wish I had done this when I was in your shoes 15 years ago.
Rental Property Investor · Denver · Member since 2017 · 121 posts · 121 votes
7y
You haven't said which city you will move to which makes a huge difference. If you are moving to San Francisco you will 100% have to buy remote on a recent grad salary/no substantial savings. If you are moving to the South/Midwest there's a good chance you could do a single family house-hack as well as the previous suggestions of a multi-family. If you can afford multi-family and it's an area you want to live go for it, SFH would be more feasible in a more expensive metro.
Look into getting a HomeReady loan (better terms than FHA). Let's say you can buy a 4bd fixer upper that needs cosmetic upgrades for $130k (will vary by market) which would rent for $1300 semi-fixed up. With a 5% down loan you would need to save up about 10k for the downpayment + closing costs (try to get seller to pay these) and have $5k on hand for basic repairs or ignition you're responsible sign up for a 0% intro APR credit card.
Let’s say you can rent the other rooms for $500 each, that would easily cashflow while providing you free housing. You can make small upgrades (painting walls, staining banisters, replacing carpet, etc.) yourself and after a year rent out the whole place for $1300 or attempt to continue to rent by the room for higher cashflow and buy another one with the same process.