Clayton, NC · Member since 2015 · 79 posts · 19 votes
So I have done a lot of research as well as been to a few seminars but I haven't be able to find any real estate investors in my local area. So next week I'm going to make the 2 hour drive to the closest REIA. Hopefully I will meet someone there who will be will into show me a few things in return for me adding value to them whatever that may be, such as a free intern, free tech support (in the last yea of getting a computer science degree) or just free labor worker for there properties. But the one question I have is that I'm only 21 and want to do buy and hold investing for the long term because I love my current IT job but I also love real estate as well. Should I go out and buy my first house and live in it for a year then try to rent it out? Or should I buy it, rent it out then continue to live in my condo I live in now?
Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
10y
I absolutely love the idea of starting out with a duplex that you live in one side and rent out the other. I never did it, but if I could go back in time I would. A SFH that you live in and fix-up then rent out may be the next best thing.
Investor · New Britain, CT · Member since 2014 · 40 posts · 12 votes
10y
your first choice which is referred to as "house hacking" is a very popular concept alot of investors have started off doing and/or implement today. The major benefit is getting a better mortgage rate compared to an investors rate. i would research "house hacking" on this forum and read what others have done executing this strategy. Good luck with your meetup at the REIA Justin.
Clayton, NC · Member since 2015 · 79 posts · 19 votes
10y
I have looked into house hacking but from all the forms I have read it seem to only work really well with multi family homes and live-in-flip. I have yet to find a form on how someone starting out and wanting to be in SFH for the long term for buy and hold have done it to success. But I appreciate you taking time to write me back.
Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
10y
I absolutely love the idea of starting out with a duplex that you live in one side and rent out the other. I never did it, but if I could go back in time I would. A SFH that you live in and fix-up then rent out may be the next best thing.
Clayton, NC · Member since 2015 · 79 posts · 19 votes
10y
i would like to do that but the only bad thing about that is I live in North Carolina (the aka retirement state) and since I'm in this for the long haul the bad thing about the duplex is most of all duplexes in my local area are in bad parts of town for 1 and 2 our market turnover for duplex tenants are high 2 and lastly for me starting out getting a duplex would mean I have to manage more then one tenant at a time which could be a little difficult for me being a newbie and all. Thanks for spending time to reply to me tho!
Sanford, NC · Member since 2015 · 38 posts · 13 votes
10y
Justin, what part of the state are you in? We have parts of NC that are booming with young professionals. Keep reading and listening to the podcasts to find a strategy that works for you.
Investor · Annapolis, MD · Member since 2013 · 27 posts · 29 votes
10y
Based on what you've shared, have you considered buying a SFH that you could force some appreciation into (i.e. it needs some TLC) and taking on a roommate or two? If you have the down payment, want to invest where you live, and have chosen SFH as your niche, that seems like it's viable option. You'd be able to secure favorable, owner-occupied financing; force some sweat equity; get your feet wet as a landlord and start to learn the ropes; and down the line, depending on how things go, you could turn it into a full-time rental and either rinse or repeat or move onto a different strategy to obtain future rentals.
Clayton, NC · Member since 2015 · 79 posts · 19 votes
10y
I'm in Raleigh NC, and if I were to do what your saying Kevin I may as well get a duplex right? Because a SFH normally would be 2-3 bed rooms with one being mine and it just seems like being a roommate with someone who shares the same bathroom, kitchen, and living room area would make the dynamics a little confusing right?
Lender · Raleigh, NC · Member since 2012 · 955 posts · 639 votes
10y
Justin,
A lot of people get started by buying, living in one room, and renting out other rooms. I know of an ideal property in Fuquay that's going to be for sale starting today where the owner can use the large MBR with its own bathroom, and then there's another bathroom for tenants to share. It is down the road from Wake Tech, so there is a huge student demand for rooms to rent. The property is on Well water, so there are no water bills, and there's a huge unfinished basement that can be converted or used as storage...in other words, I wouldn't discount this option. The duplex scenario is better than the SFH in that you have your own space. The challenge in our market is that there is an extremely limited supply of duplexes...which is why many people starting out jump into the room share strategy.
Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 100 past ones to catch up on.
Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com
Investor · Southern Pines, NC · Member since 2014 · 339 posts · 171 votes
10y
Howdy from Aberdeen. I work at Shearon Harris for now and know some people from Clayton. Ditto to what was said above. Ton of great resources here. Let me know if I can help in any way.
Investor · Southern Pines, NC · Member since 2014 · 339 posts · 171 votes
10y
The people I know are not RE investors currently, they just work with me at the power plant. I will talk to them on Monday and see if they know anyone there in RE. I also will tell you that I have a buddy who has two houses in wilmington with 4 or 5 beds each. He rents by the room and gets killer returns. He markets to college kids and has parents on lease. Loves it. I saw you post somewhere about appreciation. There are way too many deals out there to count on appreciation to be your safety net. I bought my first house at nineteen for 12,000. had to completely redo whole house because of fire damage. I got it into "livable" (tolerable) condition and worked my freakin butt off with sweat equity. one paycheck at a time I would buy a little more. We have turned it into a 3/2 now (2/1 before) and were able to pull a HELOC for 100,000 because it was paid for. It just appraised at 140,000 and I just closed and deposited a check on a flip we were able to do with cash out from first house. Force appreciation, don't wait on it. People made fun of my wife and I for the way we lived, but it is paying off right now big time.
Listen to the podcasts and you will get an huge education. Will talk to guys on Monday for you. Let me know if there is anything I can do to help.
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
10y
@Justin Dixon - It really will all depend on what you want to do and what you personally are willing to "deal" with. There are plenty of people who house hacked in an apartment or SFR. @Brandon Turner talks on the podcast about how he rented an apartment in college but slept on the couch so that he could live rent free and subleased all the rooms to his friends.
If you want to do long term buy and hold too you could consider a modified live in flip. This is what I did for my first house. Purchased a house that as a young single 22 year old bachelor I didn't mind living in and fixing while I lived there. I lived in the house for 2 years while I slowly renovated it and fixed it up. Now I have a long term tenant there. I would have done this as many times as I could...but then I got married and my wife didn't want to live through another renovation (she visited me at that house and was often put to work or had to endure trips to Lowes).
So being young and in an area with lots of other young professionals like RTP you have a lot of options you could leverage...it's just a matter of what you're willing and able to do.
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
@Justin Dixon: Welcome to BP. Everyone on here has many good suggestions for you. I'll just add to the pool. Whichever option you start with, SFR, duplex, renting out rooms .. an option to think about for a good tenant rent source is AIRBNB.com
If you've never heard of the service, long story short, people rent out rooms to guests from all over the world. If you decide to rent out rooms, this could be an option for one of the rooms. Good Luck with everything.
Real Estate Agent · Highland, UT · Member since 2015 · 407 posts · 272 votes
10y
That's how my parents bought their single-family homes. They would buy it get the cheaper interest rate by moving into it live there for a year and then move back to their other home.
My husband and I have done it for our first two properties as well the the second one we moved into because it was bank owned and we're only allowing owner occupants at first because we are willing to move we got a good deal and didn't have to fight with investors for it. We spent a year and a half renovating it and now we're moving on to our third house.
Clayton, NC · Member since 2015 · 79 posts · 19 votes
10y
@Becca Summers I really like that plan you have used to invest in single family homes, my only question I have is did you and your husband already own a home before moving into your potential SFH rental? If so was the home you left to stay in the new SFH paid off? Or were you now paying a mortgage for both homes?
Real Estate Agent · Highland, UT · Member since 2015 · 407 posts · 272 votes
10y
We purchase the first home to lived there for a few years then we moved away and rented a basement apartment for 2 years so we could count the rental income from the first home.
Then we bought our second home did a live in flip or BRRRR strategy whatever you want to call it. And now because we have rental history we are able to buy the third house.
Clayton, NC · Member since 2015 · 79 posts · 19 votes
10y
@Becca Summers so was the first home you guys bought a turnkey? Or did you have to put a little work into it? And when you say you rented the basement or you saying you turned your basement in the first home into a extra room and rented it out? Also do you still have the first home or did you sell it with appercation being pretty up all around I'm sure you were able to make some type of profit off of it if you did? Thanks again for taking time to even answer my questions!
Investor · Birmingham, AL · Member since 2015 · 254 posts · 136 votes
10y
I'm not an expert, but I am 22 and I just purchased a duplex to "house hack" so we're somewhere on the same page. haha.
I was in the same situation. The duplexes I was looking at were in bad parts of town and I wasn't about to live there. I found one about 30 miles away from where I was looking though.
So I'll tell you what I was going to do before I read about "house hacking".
I was going to purchase a stinky old house in a great neighborhood with a 203(k) loan.
After live-in flip with the k loan, Refi as investment property after a year or so and rent out. Then Move to the next one.
Clayton, NC · Member since 2015 · 79 posts · 19 votes
10y
@Nicholas Armstrong I really like that idea, I actually just found a rent to own deal that's also needs a little work I was things about living in there while I work on it then either flip it and resell it or keep it as a long term buy and hold.
Real Estate Agent · Highland, UT · Member since 2015 · 407 posts · 272 votes
10y
@Justin Dixon the first home was a short sell back in 2008 not to bad of condition we did a yard and fence it was only two years old. We thought we were buying at the bottom of the market but our market continued to drop for two more years. Last year we refinanced it down to a 20 year and we still own it.
We actually moved out of the first home and rented it to someone else and in the meantime we rented a thousand square foot basement apartment for my inlaws.
Real Estate Agent · Highland, UT · Member since 2015 · 407 posts · 272 votes
10y
I forgot to answer your other question both homes have mortgages one was 100% conventional back in the day. Second is 5% down conventional and spend $25k in rehab.
Kansas City, MO · Member since 2008 · 143 posts · 41 votes
10y
I would say it depends on how much cash you have.
Buying an investment property with conventional financing you will need 20% down.
If you buy a personal residence first (house hacking) you can get in for as little as 3.5% down. Rent it to a roomate and then eventually rent out completely.
If you have the capital do both. House hack and buy a SFR Investment Property with 20% down. I actually bought my rental houses with a partner to start. That is another good idea. I only needed 10% down that route and then I also started house hacking. I ended up 5 years later with 10 high end houses and retired from the work force.
Clayton, NC · Member since 2015 · 79 posts · 19 votes
10y
@Becca Summer ok thanks for answing my question it was very helpful, @Andrew T. I was actually thinking about doing a rent-to-own with the house price being $50,000. And I found a property (condo) that I could buy and rent it out while I do the house hacking thing in the rent to own because they house is a sfh and needs a little work to it. What you think of this?
@Becca Summers I really like that plan you have used to invest in single family homes, my only question I have is did you and your husband already own a home before moving into your potential SFH rental? If so was the home you left to stay in the new SFH paid off? Or were you now paying a mortgage for both homes?
Become a live in flipper, you buy your first home a fixer upper (out dated ugly, but still good for an FHA loan), fix it while you live in it for about 2 to 3 years, now you have increased the equity/value, sell it cash out the equity get your next fixer upper put down only the minimum for the down payment, live in it for 2 or 3 years fixing it as you go and repeat, you are now making your "snowball" of money bigger. That's how you can start. In this business it's all about patience.