Intro and Questions...

4 Replies

Hey guys super excited to get more involved in BiggerPockets. I've been listening to Youtube/Podcasts but want to dive deeper. I am located in the Kansas City market which has been booming. I am 19 I got my license last year after graduating high school early. I've been helping buyers of all types and enjoy it. The investing side intrigues me the most because I can build wealth and leave a legacy. Working towards saving money along with building credit.Owning multi-family along with developing is the strategy I want to pursue. The few questions I have are...

1) The ideal property for my first investments would get a 2-4 unit and live in one unit. Is conventional or FHA the best financing? I'd be able to do 10%-20% if I went the conventional route.

2)Thoughts on property management for the first one? I'd want a property manager to manage since it'd be a lot to handle.

3) Partnering a good idea for the first one? If I did partner what would the best way to structure it?

I'd appreciate any feedback and would love to connect with new investors :)

@Caleb Brown

You will need a 2 year employment history. 

I think FHA is a great way to house hack and get started. If you are living in the property, I see no reason why you can't manage the property yourself. You rent out the units, collect the rents, and hire out the work you don't want to do or can't do. There is no need to pay someone else to do these things, when you are right there living in the property, plus it is a good experience for you.

@Caleb Brown  

1. The loan you should get (FHA or conventional) would depend on your particular circumstances. If you want to increase your ROI by putting as little capital into the deal it may be ideal to do an FHA. If your goal is to build as much wealth and/or equity than conventional is the way to go. A conventional loan will also allow you to build up equity faster to the point where you can pull out an HELOC on this property.

2. I am not currently investing in real estate but I know many investors that use Voepel Property Management. I would do an online search and ask for referrals to local property managers. Reviews are a great indication into how they treat their tenants and clients.

3. Partnering on your first deal may not be a bad idea. Assuming everything equal, if you partner with one individual on a deal with the same percentage of ownership, you will make the same return as if you put up all the money and kept all of the cash flow. With a partner you will likely put up half the capital and earn half the cash flow than doing it by yourself. Not to mention how much you would learn if you partnered with an experienced investor. 

@Nathan Roberts

I like the conventional route for equity reason and lower monthly payments. I like FHA because it's only 3.5% and I can use the other funds for other deals or marketing. I got a few referrals for PM but I'll research them. Totally agree on the partnering part. Thanks for the advice!