Advice on my newbie strategy to REI please..
Hi BP members.
I am eager to start investing in multifamily homes as buy and holds for rental income. I did cosign on my mother's home after parents divorce while I was still a college student. However, I've never partaken in ownership responsibilities.
So my plan is to purchase a multifam, live in one of the units for a year while saving my usual 35% of salary plus 15k I'd now be saving from what I currently pay in rent. I'd then have a healthy down payment for another home; Move into that one and rent out full property on 1st location. Eventually repeating the process until I can supplement my income.
If I'm not mistaken, I can get a conventional loan and put 5-10% down to avoid PMI after paying down 20% of 1st home. The rest would be full 20% down.
Given the mortgage and rental rates in my area, I'd likely need 8-10 units(3-4 properties). So what do you guys think? Also, considering this strategy, would it be best to start an LLC up front, switch after having purchased in my name, or just getting a large umbrella insurance?
Any information would be greatly appreciated. Thanks in advance.