New to Real Estate · TX · Member since 2021 · 9 posts · 8 votes
My wife and I are in our first year of marriage and we decided to rent an apartment instead of buying a home so we could knock out debt. We're 6 months into the year lease and we've knocked out all debt and have an emergency fund. When the lease is up we are going to move in with her mom so we can save more money. We both want a house of our own but we're also open to invest in real estate before buying a home or use our first home as an investment. Just to add we have stable jobs that bring in good money. I would like to hear opinions on what others would do in this situation. If any further info about our situation is needed feel free to ask.
Good job paying off the debt bro! Smart first move!
House hack!!! So many different house hack strategies that can get your building equity and living for free still.
I had a hard time finding a duplex, triplex etc in a good part of town. So instead I focused on larger homes with a “mother-in-law suite”. I made sure it was a walk-out basement unit and it either had laundry or I could figure out a way to add it. That strategy has worked out well for us.
Building equity in a better part of town and my mortgage is paid for by the tenants in the 3/2 house upstairs!
Good job paying off the debt bro! Smart first move!
House hack!!! So many different house hack strategies that can get your building equity and living for free still.
I had a hard time finding a duplex, triplex etc in a good part of town. So instead I focused on larger homes with a “mother-in-law suite”. I made sure it was a walk-out basement unit and it either had laundry or I could figure out a way to add it. That strategy has worked out well for us.
Building equity in a better part of town and my mortgage is paid for by the tenants in the 3/2 house upstairs!
Thank you for the reply Beau! Ive heard the term house hacking before but never looked into it. I'll definitely be looking into some house hacking strategies that we can do where we live. Once again thanks for the reply!
@Jeremy Flores Congrats on getting your debt paid off! I know how good that feeling is and how HARD it can be to stay disciplined and get it done.
I fully agree with @Beau Watson - you should definitely consider a House Hack! Buy a multifamily (if it's in your budget and you can find one), live in one unit, and rent out the other. Doing it this way will allow you to have a lower down payment, 3-5%, since it is owner-occupied! After a year, rent out your unit and repeat with the low down payment!
If you're not able to find a MFH, look for a single family home that would be easy to create a separate entrance, add a kitchen/bathroom, OR, look for that house with a mother-in-law suite.
Happy to connect further if you have any questions!
@Jeremy Flores house hack is your best bet. Find a multi-family that you can buy as your 1st home and live in one unit and rent out the other(s) to cover your mortgage. Save up some more money during this time and eventually move out to another house and repeat or just find another investment property. House hacking can be beneficial for 1st time buyers. Good luck with your search and kudos on paying off the debt.
Think of it as choosing to get into debt vs. buying other people’s debts. When you get into debt (buying a house) you have to work to make money to pay someone else. When you own other people’s debts (leases on property) they go to work to pay you.
With buying a house once it’s paid off you now only owe property taxes. So there is a savings of whatever you would have paid in rent by choosing this option.
With buying a rental property once it’s paid off you now have a steady stream of cash equivalent to or more than what you pay in rent.
That’s not even factoring in the fact a loan on a rental property is paid by someone else (the tenants) during the duration of the loan.
I would avoid investment in single family homes or anything that requires immediate renovation for now. My reasoning is that your income may not be sufficient to pay for both the mortgage and rent for an extended time where you don’t have a Tennant during remodeling or someone isn’t paying their rent. With a multifamily property there’s almost always someone in one of the units operating like a built in safety net minimizing your losses from non-payment or times of vacancies (remodels/repairs, broken leases, etc..) in one of the units.
One more reason to invest over buying is as the equity grows. You can refinance for the difference in value and use that money as a down payment for an additional investment property (without taking additional money from your income). Doing it that way will take longer to be paid off but will greatly increase the cash flow once it is paid off.
@Zahid Ali@Beau Watson@Kayla Givens Thank you all for the feedback! If it wasn't for you all mentioning "house hacking" I probably would not have thought to do it. Although we're not ready to buy right now I have started to look at locations to get an idea of whats out there. I will definitely reach out for any other questions I may have!
Woo hoo!! I would start analyzing deals (if you're not already) using the calculators on the site as well. Reach out if you have any more questions! Happy to help :)
@David Graham thank you for the insight David! A multifamily property sounds like the ideal thing for us. I will use this info going forward with my research.