I'm another one of the new people who is inspired by starting REI as a business to get into and I've been doing my homework however I cannot seem to find the answer to one of my questions:
I am currently not a home owner and currently an employee at a Wells Fargo Bank. That being said, I can get the benefits of having discounted loans on a whole half of a percent interest off the market rate should I buy a house. I also know there are amazing benefits when people go buying their VERY first house as well. In short, I can use the benefits of both world's in conjunction.
However, I also like to start wholesaling some transactions to start the REI business. My question is: Is it better to buy your first house before you start your wholesaling real estate investments? I was thinking wholesaling properties from seller to the would be buyer, and technically, you would not have "ownership" in that house if the transaction is going to the would be buyer. Would making a wholesaling transaction nullify the benefits of buying your VERY first home?
A good option for people starting out is to buy a multi-family building, live in one of the units and rent the rest of them. You can put only 3 % down with an FHA loan and you can even ask the seller to help you with closing costs. After a year, you'd be able to move out of the property if you'd like to. It's one of the most affordable ways to aquire properties since you would be require to put 20 % down if you buy an investment property. You can also buy a foreclosure from the HUD website. Sometimes you can find very cheap properties and they have an owner occupant period which is very helpful because you don't have to compete with investors for a certain period of time.
Wholesaling is a good way to start learning about RE but it's definitely not easy. In order to be a skilled wholesaler, you need to be able to find deals with a lot of equity, determine ARV and repair costs correctly, good marketing and interpersonal skills (you talk over the phone to motivated sellers) etc.
I so wanted to respond but Daniel said EXACTLY what I was going to say! Definitely invest in a 2-4 unit as your first deal!
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