Investor · Rochester, NY · Member since 2013 · 103 posts · 55 votes
I am currently 27 years old and still live at home with my parents. I want to get into the real estate field, particularly purchasing rental propeties, and I am not sure if now is a good time or not.
I do have a serious girlfriend at the moment, but wouldn't expect to start looking at homes together for another year or two.
Some poeple that I talk to tell me anytime is a good time to invest in real estate, and other people tell me that I should own a primary residence before I even begin looking for investment properties.
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
Anthony Barbato always think twice about investing with someone you're not married to, unless you have a good contract. Relationships can go south.
If you're still living at home and looking to move out, one suggestion mentioned over and over on the forums is to buy a duplex, live in one side, and have the other side pay your mortgage. This way you get experience several ways:
a) Looking for investment properties
b) Buying property
c) The whole rental process -- showings, screening, etc.
This will help you decide several things:
a) Do you want to be a landlord?
b) Do you want to continue investing in real estate?
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
Anthony Barbato always think twice about investing with someone you're not married to, unless you have a good contract. Relationships can go south.
If you're still living at home and looking to move out, one suggestion mentioned over and over on the forums is to buy a duplex, live in one side, and have the other side pay your mortgage. This way you get experience several ways:
a) Looking for investment properties
b) Buying property
c) The whole rental process -- showings, screening, etc.
This will help you decide several things:
a) Do you want to be a landlord?
b) Do you want to continue investing in real estate?
Investor · Rochester, NY · Member since 2013 · 103 posts · 55 votes
13y
Dawn A. I think you misunderstood my question. My girlfriend and I would be getting married before we started looking at purchasing a home together. The real estate investing that I want to start would be on my own, and have nothing to do with her.
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
Anthony Barbato - you'd be surprised that if you are in a "serious relationship" how she might take you doing something like investing in real estate "having nothing to do with her", as this involves dedicating part of your life to it and you are supposed to be part of her life (and her yours).
Others on the forum might have advice in this regards, but this really isn't a relationship forum!
Investor · Rochester, NY · Member since 2013 · 103 posts · 55 votes
13y
Dawn A. First of all, she is encouraging me to start investing in real estate. I am currently a Plant Manager, and would like to some day be in a position where I can invest in real estate full time.
Second, as you said, this is not a relationship forum so I would appreciate someone giving me advice on my original question.
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
Anthony Barbato well I did answer your primary question -- you could look into buying a duplex and living in one half, then you are buying a residence AND an investment property at the same time. At some point when you want to move, you then just rent out the half you were living in. If you wanted to, you could then get another duplex and rent out the other half, and keep doing that.
Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes
13y
Anthony Barbato
Best for financing purposes is Owner Occupied 1-4 family. Lowest down and lowest rates.
Good Luck Investing, Mike
PS "The real estate investing that I want to start would be on my own, and have nothing to do with her. " I guess there is a first time for everything;-)
PPS What's this girlfriend do? Maybe you could dovetail your part time investing and talents with her free time and skills?
Investor · Merrillville, IN · Member since 2009 · 252 posts · 104 votes
13y
Hey Anthony Barbato, I believe the only thing Dawn A., misunderstood probably was the fact that you aren't looking to invest with your soon-to-be wife, as you mentioned, however, I would have to agree with her when she says that you should probably invest now by purchasing a duplex, that way you would "kill two birds with one stone" - you would own a piece of real estate as well as be purchasing your first residence. Once you get married, if you and the wifey decide to purchase a new home, your current duplex will assist you in the process and you will have gotten some experience being a landlord to see if it would be something you would want to continue doing in the future. Hope this helps.
Rental Property Investor · Glens falls, NY · Member since 2013 · 124 posts · 50 votes
13y
As others have said, my vote is to buy a multi-fam house 2-4 units. You can either move into one of the units right away or rent them all out for some investment income. Later if you guys get married and want to love together you can always move into one of the units when a tenants lease is up, or just buy another house. The choice is yours, but I feel multi-fams have the most diverse options to the beginning investor.
Investor · Culver City, CA · Member since 2013 · 9 posts · 1 vote
13y
I am self appointed Robert Kawasaki disciple. Read the famous book Rich Dad, Poor Dad.(not paid to endorse)
In very general terms, for wealth accumulation, one needs to have money work for you. So, to the best of your ability, every dollar spent out of your pocket, should be towards an asset that puts dollars back in your pocket. "bigger pockets" in the end right?
A single family home, owner occupant is almost always a liability in a primary market, as it takes more dollars out of your pocket than is it can put back, ...no matter what tax and accounting magic can be pulled. IF home ownership exponentially increases your overhead, like it can in a primary market, you loose that cash investment opportunity for asset acquisition. The power of time is on your side, exponential growth with increasing assets that are paying for themselves & cash flowing passive revenue streams is, in MY opinion a better outlook than loosing time & opportunity by stretching your budget for your own home in a primary market.(ALL eggs in one basket - single prospect) Home ownership is an emotional decision, for some the only decision, its not necessarily a financial one.
It goes without saying everyones situation is unique and their market is unique, only you could decide whats best for you. Run the numbers and the numbers with tell you emphatically what to do. Jeeess, I gotta learn to get to my point quicker. Good luck
Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
13y
Seems like a simple question but it isn't because of all the factors we don't know. I like the fact that I can get into a fixer upper sfr with no money down and live there for a couple of years while I fix it up and sell it tax free at retail. I also like the idea of holding such properties because I have fewer tenant problems then with smaller multiple units. and if the need arises I can sell one off instead of a whole building.
If you want multiple units think larger, you can often find something you can control with a master lease and a option and have a onsite manager.
My suggestion is to start building a file of all multiple unit properties and drive by them, just like a SFR you look for the run down ones and the ones you can usually buy for no or little down and do fix up and increase equity.
Don't waste a year, start yesterday, you won't regret it.
Investor · Rochester, NY · Member since 2013 · 103 posts · 55 votes
13y
Brian P. I have a newbie question so please bear with me. You mention a couple times in your post getting a property with no money down. I have personally talked with numerous people who have told me a 20% down payment on any type of mortgage is still the norm. How are you going about receiving a mortgage with no money down?
Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
13y
Anthony
Consider checking on HUD homes. Owner occupied get first crack before investors. Look at their multi-family offerings. My son got a HUD 3 family had HUD de-lead each unit for free. Lived for free with the other 2 units rented.
Had house 3+ years just bought SFR rents out the 3rd unit for cashflow.
Investor · Cedarburg, WI · Member since 2013 · 439 posts · 150 votes
13y
Anthony Barbato - I would echo what most have already said and simply share my story as it is quite similar to yours.
I was about 25 (2 years ago) and interested in RE so began saving money planning to buy a duplex, live in half and rent the other half. I ended up buying a duplex via an FHA loan (3.5% down for owner occupied properties) I immediately rented the other half and was living rent free. I was able to spend that year making improvements on the property to make easy to manage when not living there.
About a year later I got married and my wife and I bought a single family home together and moved into that. The trick here is that with an FHA loan you typically need to occupy the home for at least a year before you are able to move out and rent the whole property. This now has allowed me to own a duplex which I lived in for a year, and now also a single family home. The duplex is still cash flowing about $400 per month and I spend a fairly limited amount of time "dealing with it". It has really been a great experience for me so far, and I recommend it to anyone.
Go find a duplex in a decent area and commit a year to living there and you can do it for 3.5% down very easily!