First time buyer/Real Estate Advice

[Kendra Beth]

Hi All,

I’m new to this forum, joined recently but have been reading around for a few months.

My husband and I are wanting to Explore our options for real estate and hopefully have a few rentals.  We’re here in Orange County California and have never purchased property before.  We’re in our late 20s.  The last few years we have worked on paying off student loan debt etc.  Only debt we have is car payments less then 700 a month for both cars.  Have 35k saved so far.  

Im looking for advice on what our next move should be.  We go back and fourth on both scenarios and have yet to decide on one.  Ultimately we would like to accumulate rental properties but also own a home of our own. 

Scenario 1:

We can afford to buy right now around the 400k mark.  This buys a small 2 bedroom here in our area.  This is ok for us and our 3 year old.   We would live there for 2 years or so, save money, rent out the condo, and then purchase a 3-4 bedroom where we would stay put. Hopefully purchasing another rental after 5 or so years.  This scenario sounds good when I write it down but scares me to buy at what seems like the top of the market right now.  Also, we would like to expand our family by 1 child so max time we would live here is 2 years.  Not knowing where the market or economy would be in 2 years also scares me.  

Scenario 2- Continue renting for the next few years and save more money....hoping for a price adjustment in the market buy a 3 bedroom, live there, and still purchase rental property after 2 years keeping the 3 bedroom and either staying out or renting out that as well.  

Other options? 

Thanks for any advice in advance.