Specialist · Jonesboro, GA · Member since 2015 · 16 posts · 9 votes
Hello everyone!
I was just approved by my lender for 150k and now I am in the process of buying my first home in the Atlanta area. I currently live at home with my parents paying a small amount every month. I have a question for you all; Do I...
1. Buy a house around 100k, rent it out and either stay at home with my parents or get an apt in a nicer area?
2. Or do I buy a home, live in it, and try to pay it off as fast as I can and then move on to a bigger better home in a nicer area afterwards?
@Marcel Williams you need to call me brother! I have lived in snellville just about all my life. I literally did what your thinking about. Moved back in with my parents after college(engineering). Got a job at coca-cola( not engineering) so money was tight but I had to get out my parents place. I bought a duplex 200K in norcross and live for free now (well almost) looking for my next property. I made the mistake of not having my numbers right to move out quickly(I lose about $50 a month if I leave now. which isnt bad but its not good either). BUT what I did right was use NACA as a first time homebuyer with no downpayment and closing costs and low interest rate 3.5%. if you can hold on to your job a little longer this might work for you to squeeze out a little more house to get a duplex in the 200K price range. Gwinnett county is hot when it comes to multifamily thats what i focus on. If your interested I can give you the full story and you can get a leg up on your investing. Good luck!
Since you are on Biggerpockets, its safe to say you are trying to go into real estate investing. So why not house-hack?
Meaning you buy a multi-unit, like a 2 family house and you rent one part out to tenants and the other half you live in it for about a year or two before you move out and find other properties.
House-hacking pretty much covers the 2 options you had stated.
1. With house-hacking you are able to move out of your parents, become a landlord and have either half or all your mortgage being paid by your tenants.
2. You don't have to wait years to pay off the property then move out to nicer homes. After 1-2 years of living in a house-hack, you can move out, rent out the other side of the unit you were living in and find another house for yourself personally. Meanwhile, you now have tenants on both units paying your mortgage for you.
I had a feeling that something like that could be the issue, but I do believe that you can still house-hack with a single family. Its just that your tenants will be your roommates. I don't know how comfortable you are with that.
You don't necessarily need a multi-family home to just house-hack, you just need to be able to accommodate a roommate. Let's say (least ideal scenario it seems) you buy a 2br and are looking to find a roommate to share it with you—making you a landlord and a roommate. If living in the home is worth more to you than what you would earn from renting to a second tenant, then move in! But since it sounds like you don't have any living expenses (unless your parents are charging you rent) then from a financial perspective, filling the house with tenants and not moving into it would be most profitable.
Do what works for you. But, a good option if I had to do it over is this. Find and buy a small multi family using investment criteria. Live in a unit and rent the rest. Then move to a live in flip for next property etc etc. Research the BRRR method as much as you can and build that wealth portfolio.
@Marcel Williams I like what others have said, and want to add to it. My vote is to buy at least a 2 br house. Live in it and either long term rent the other bedroom(s) or short term rent them via airbnb. There is a BP team member who was interviewed on the podcast I work for, I believe it was @Craig Curelop, he short term rents all BR's and sleeps on the couch of his own home! Or did... Am I right Craig?
Depending on your income could you hold off another year before buying and just bank most of your paychecks in the meantime? Then you would have more money to perhaps afford a duplex?
You would have more money at that point for a larger down payment so a large downpayment plus a loan for 150,000 would make it possible to afford a bigger property. Maybe you could work overtime at your current job or pick up a part time side job to really increase your home buying options.
@Michael Ehmann, Im not totally sure, ideally Snellville or somewhere near the Gwinnett/Dekalb line. But more realistically because I don't want to spend that much, Stone mountain or maybe end the West End area since it seems like its getting cleaned up some.
@Amy Beth I'd rather not hold off too long because I'm not sure how long I can hold onto this job that I have. I run a video production company when I'm not here at work and this job has been getting in the way of me doing some jobs, and the business is number 1 priority. I can definitely already see that it is going to be a struggle to balance to two of these situations as I get deeper into this job.
@Marcel Williams you need to call me brother! I have lived in snellville just about all my life. I literally did what your thinking about. Moved back in with my parents after college(engineering). Got a job at coca-cola( not engineering) so money was tight but I had to get out my parents place. I bought a duplex 200K in norcross and live for free now (well almost) looking for my next property. I made the mistake of not having my numbers right to move out quickly(I lose about $50 a month if I leave now. which isnt bad but its not good either). BUT what I did right was use NACA as a first time homebuyer with no downpayment and closing costs and low interest rate 3.5%. if you can hold on to your job a little longer this might work for you to squeeze out a little more house to get a duplex in the 200K price range. Gwinnett county is hot when it comes to multifamily thats what i focus on. If your interested I can give you the full story and you can get a leg up on your investing. Good luck!