Should I invest in real estate before I own my own house?

10 Replies

Why not both?? Buy a small multi-unit and live in one side. This way you can apply for an FHA loan (3.5% down-payment) and still be an RE investor

@Suny Capezzuto. This is a “means” question. Not an ends question. It’s ok to to do either depending on the marketplace that you want to live or invest. It’s harder. To do owner occupied in higher cost areas such as so cal or Manhattan. But Cleveland is easier. So it’s up to the earner as an opportunity cost question.

@Austin Cooke buying a home is for suckers and becomes to expensive to handle (property tax, mortgage, repairs) and nobody is paying that for you.

As people said, you can buy a duplex/triplex/4plex and live in one unit.

Do not buy your own home until you cashflow 3-4k a month passive real estate income.

I always wanted to be a real estate investor. I saved up money and purchased my first home when I was 30. The property was a short sale and I viewed it as an investment because it had great equity and was below market value. The reason I purchased a home is because it was the "next phase of life" and "thing to do" when you turn 30 and to make me feel like I was actually doing something with my life. Homeownership is believed to be a big accomplishment but it is all BS. I fixed it up and sold it after 2 years and broke even once you add in taxes, repairs and mortgage interest. As Grant Cardone and many experts state that the home you live in is a LIABILITY and not an INVESTMENT. After the close of the sale I put all the funds into flipping and rentals and never looked back. I currently rent the home I live in because after crunching the numbers aggressively it is more beneficial to rent in my townhouse development here in NJ which was a combined property taxes and HOA fee of $900/Month before mortgage. Complete total waste with 20% on $400,000 my PITI was over $2,900 but i rent it for $2350 with no money out of pocket. Took the down payment and purchased a 4 Family. Homeownership in high taxed states is a complete scam for the government and banks to get rich. YOU have to make the choice if you want to be a REAL ESTATE INVESTOR or buy a house because its so cute and socially acceptable. I still try to explain to my uneducated relatives the strategy I go by and they look at me with 5 heads and say but the landlord gets rich not you. I reply "my rental properties pay for me to live in a luxury townhouse for free" while recycling the downpayment money and having all the other real estate benefits.......

Owner occupied investing (think high leverage and low financing costs) in a highly profitable property (typically 3-4 units) assuming the latter fits your living taste as well, may be one of the easiest and most successful investments you will ever do in your life (in my experience can be infinite CoC return even in the absence of value-add).

It all depends on your investment objective. Buying the 2-4 unit owner-occupied is a good idea only if you can get one in the desired neighbourhood which you want to live in.  In most cases, 2-4 properties are located in less desirable areas. Do you really want to live in those neighbourhoods?  It is also much harder to find and buy. You could be waiting for a very long time.  You gotta look at all aspects of the market place.