I dont own a house.Should I look first to buy it for my self?

Question

Hi all,

I am just starting to learn about real estate and loving the idea so far.Me and my wife came to U.S.A 2 years ago with green cards (from Albania) and we settled in Philadelphia,PA.All the time we thinking to buy a house but since this credit thing has been an issue for us i think we will have to wait a lil bit.My question is simple:should i wait till i buy my house and then start looking for investments in RE or should i start looking even if i rent a property for my self?I will really appreciate any suggestion.

Thanks,

Elton LIKA

Daren H. · Answer

You do not need to purchase a primary residence before purchasing an investment property. Think about it, millions of people of people buy stock in companies and never own a business of their own. Buying your primary home will be much different for most than buying investment property. You should focus on educating yourself on RE investing and getting your credit positively established. You could also consider doing both at the same time by buying a duplex, triplex or quadplex and live in one unit and rent out the rest.

Elton Lika · Answer

@Arianne L. actually i have like 4 credit cards with a credit limit by $ 12,000 and i am trying to pay all my balances every month (sometimes it get frustrating :) ).I found i had a good credit when i bought my first car(which i consider the worst investment i have ever done) with financing (last month) and i got approved without any co-signer.Still i know there is a long way to go for getting in RE but i really like your idea for a duplex or triplex.It is a great investment while you can live there by your self and in the same time renting it for other tenants.

I thank you very much.

Arianne L. · Answer

@Elton Lika Welcome to BP! I only moved to the US 2 years ago from New Zealand as well. The first thing I did was get a low limit credit card (500) and just used it and paid off the balance every month. Eventually the credit card increased the limit to 2.5k after a year. Last year (1 year since I moved here), I thought my credit would be bad since I only really just have that one credit card. My credit score was around 720 and didn't really have a problem qualifying for a mortgage. If you don't have a credit card already, I suggest opening one. It wasn't hard for me at all to get that initial 500 credit card and it helped my credit a lot.

I also recommend looking for a personal residence first. Still run your numbers as if you are buying one to rent out. But since YOU are YOUR RENTER. It eliminates a lot of the risk that you take on when having renters (them not paying rent, not taking care of your property, etc.). Also, you can pocket the property management expense since you'll just be managing yourself. What's better is if you can buy a duplex, triplex or fourplex, and live in one unit while you rent out the other units.

Elton Lika · Answer

@Brandon L. thanks a lot for your answer.It totally make sense what you said.I will work on my credit and in the main time i will learn more on this investment opportunity.I am a civil engineer but still didnt find my self here as one since it is a bit tough to get integrated quickly.I found BP to be a really helpful source for newbie investors (i dont know if i can call my self an investor since i didnt invest anyplace :) ).

Once again thanks for your suggestion.

Brandon L. · Answer

@Elton Lika a lot of people think that to be an investor you have to rush out and purchase a property. This is false.

Your credit is not in good enough to purchase your own place, so it will be the same for any other house you try to buy.

I would suggest working on improving your credit. Depending on the extent of the damage, you can get it in shape to buy anything within 12 months. With most immigrants that I see, its not a matter of having bad credit, it's the issue of having no credit at all. That can be fixed in less than 6 months.

There are other strategies you can use to get into your own home or investments with no credit, but I feel what I suggest will set you up for long term success.

Take 12 months to up your credit, and real estate IQ, and the world will be yours :) feel free to reach out if you need anything :)