Hey guys, I am a 25 year old business consultant that makes 75K a year right now. I can confidently say I am expecting to be making six figures in the next two years. I want to buy a home and stop renting but am looking for a "safe" way to do it. What would you say if I told you I have been brainstorming a plan to buy a piece of land, live in a camper, and while living in the camper start building a home at the front of the property? I could then rent out the camper for passive income, and I plan to rent out at least one of my house bedrooms to a trusted friend. In my head, I could live mortgage free while making my normal house payment, therefore paying down my mortgage twice as fast. Any thoughts? Has anyone tried or done this successfully? What are the pros and cons of my utopia plan here?

@Tyler Sample why don’t you just by a house and house hack it? Your proposed plan has way too many moving parts

Hey @Tyler Sample , I think you've got a great plan and the same kind of thing I would have loved doing when I was 25 (I'm 67 now?!). I do agree with @Parker Eberhard but think if you have that kind of energy and would get great satisfaction from building your own home, then go for it.

Check the rules where you are as they relate to parking and living in a camper, and or renting a camper. You couldn't do that here in Fort Collins Colorado where I live (kinda wish I could) :( 

What kind of "piece of land" do you have in mind? Large acreage you can later subdivide, or keep all to yourself and enjoy wide open spaces with peace and quiet? Or are you looking for something more affordable like a quarter acre or less?

I see you are in San Marcos Texas. A lot of wide open spaces around there and Dick’s Classic Garage Car Museum with its exhibits of vintage vehicles; I'd like to check that out.

I know people that have executed your plan successfully. Here's my question: do you really want a camper parked on your property with someone living in it? And what kind of renter do you think it attracts that is willing to live in a camper?

There are better options. You could build a tiny house, say a 1-2 bedroom with 600sq.ft. and live in it while building the main house. Then execute your plan. The difference is that a tiny house will appreciate in value, increase the value of the property because it's permanent, and won't look like crap.

But why not just buy something existing? If you're willing to live in something small for a while, consider buying a fourplex and live in an apartment for a year while you build your home. Or buy a nice duplex with larger units that you can stay in for years.

Personally, I don't see building a dream home as a wise step in the overall plan.

Originally posted by @Parker Eberhard :

@Tyler Sample why don’t you just by a house and house hack it? Your proposed plan has way too many moving parts

So you're saying just find a house to flip? or to rent?

Originally posted by @Nathan G. :

I know people that have executed your plan successfully. Here's my question: do you really want a camper parked on your property with someone living in it? And what kind of renter do you think it attracts that is willing to live in a camper?

There are better options. You could build a tiny house, say a 1-2 bedroom with 600sq.ft. and live in it while building the main house. Then execute your plan. The difference is that a tiny house will appreciate in value, increase the value of the property because it's permanent, and won't look like crap.

But why not just buy something existing? If you're willing to live in something small for a while, consider buying a fourplex and live in an apartment for a year while you build your home. Or buy a nice duplex with larger units that you can stay in for years.

Personally, I don't see building a dream home as a wise step in the overall plan.

I am willing to live in something small, I like the idea of living in a tiny home and having small investments like that. But from reading articles online it seems owning a full-size home is a better investment when your talking about 10 years or longer. However, I would like to be on the aggressive side when it comes to buying and selling real estate. Preferably sell my first home after 2-3 years, then start decreasing flip time, given that I am gaining the understanding of this game. 

@Tyler Sample you can read up on house hacking on BP or some of the podcasts for strategies, but you basically buy a property that you can then rent a room / basement / etc out to help offset your mortgage.

I guess I want to know what your end game for this house is? Is it an investment, a place for you to live for ever, etc? The costs of finding a piece of land to build on (if you need to run utilities, etc), as well as drawings, permits, financing, carrying costs through the construction / permitting process, etc will far surpass buying something existing. Also, buying the camper will also be another cost to consider, as well as the maintenance costs when you rent out (will also need to have utilities run to it unless you want to sh*t in a bucket)

@Parker Eberhard Very good points. Right now I see it purely as an investment, a good #1 to start my portfolio and get my feet wet. Maybe that should've been my original question - what is a good first buying situation if I want to get into investing?

@Tyler Sample that is the million dollar question...I would start by soaking up as much as you can on the BP forums and podcasts, and figure out what it is you want to be doing in your investments (do you like constructions and want to start flipping, do you like finding deals and want to start wholesaling, do you like landlording and dealing with tenants, etc) and then start looking for deals that compliment your interests

A primary home is not an investment.

A home has benefits but it will not produce the returns you would get with an investment. If I were starting over without kids, I would house hack as many times as legally possible, moving every year, until I were 100% financially independent. Then, living off that income, I would consider purchasing a single-family to live in long-term.

A primary home is nice, but I actually see it as a burden more than an investment. I put up with it because I'm raising kids. Once they're gone, I'm house-hacking or renting, baby!

@Tyler Sample

With your current income right now you can easily buy a house and rent out the rooms. Find a property with a large basement, build two small bedrooms down there so you can rent it to two people while rent other rooms upstairs out as well. Do the math and you'll be alright.

@Tyler Sample

There's a book on this called Set for Life that answers many of the questions you're asking, which all come down to what you can do about your housing situation to minimize what you obviously understand are the drawbacks to owning a property that produces no income. The book was written by @Scott Trench , the CEO of this website, and I think you'd get a lot out of it.

What I would do in your shoes is what @Nathan G. suggests -- start saving up and look for a quadplex in good repair in a nice neighborhood within a very short commute from your job. You can buy one with an FHA mortgage with only 3.5% down. Live in one of the units and rent the other three out. If you were making less money and had expressed a yen to learn how to work on houses, I would suggest a duplex -- a quadplex's mechanicals are usually far too complicated to DIY successfully. But you've got the income to make the bigger place happen. A self-managed quadplex will also introduce you to the art of successful landlording. Now's the time to learn how to do it, even if you plan to use property managers for it for the rest of your time in real estate rentals. You're still going to have to manage your managers, and you can't do that if you don't understand what they're doing and why.

Whatever you do, whatever expensive tastes you've begun to cultivate, whatever urges you have to buy nice stuff now, step on them. Go back to living like a student.

You've told us nothing about your debt situation. That's a nice compensation package to get into at such a young age. Did you need a college degree for it? Did you borrow money to get through school? How much, and on what terms? Do you drive a nice car that you bought with a car payment? How much is it leeching away from you every month?

The big three expenses of the American household are housing, transportation, and food. If you can minimize these three expenses, with the kind of income you're talking about, you'll have amassed a fortune in just a few years and will be able to do whatever you want for the rest of your life, regardless of how much money it makes.

@Jim K. and everyone else - Thank you for the replies! This has really helped. Jim - yes, I have about 50K between my student loans and my new car. Student loans I couldn't help but now I'm focusing on paying down the car, refinancing, and maybe trading it for a beater. It was an impulse buy. So once I get rid of the car payment I can afford a $1400-$1500 mortgage pretty easily. Thank you for the book recommendation. I will definitely check it out. 

Would you recommend me looking at a duplex rather than a quadplex since I don't know much about hacking and because of my current debt? 

Originally posted by @Tyler Sample :

@Jim K. and everyone else - Thank you for the replies! This has really helped. Jim - yes, I have about 50K between my student loans and my new car. Student loans I couldn't help but now I'm focusing on paying down the car, refinancing, and maybe trading it for a beater. It was an impulse buy. So once I get rid of the car payment I can afford a $1400-$1500 mortgage pretty easily. Thank you for the book recommendation. I will definitely check it out. 

Would you recommend me looking at a duplex rather than a quadplex since I don't know much about hacking and because of my current debt? 

Hi, Tyler.

A Federal Housing Administration loan, typically called an FHA mortgage here on this site, will allow you to buy a home with only 3.5% of the purchase price saved up as a down payment. There are other people on this site who know a great deal more about this than I do and can really help you navigating the FHA requirements.

You can buy a single-family, duplex, triplex, or quadplex with such a loan. With such a low down payment and reasonable money coming in, usually the best possible investment from a purely financial standpoint would be a quadplex. However, I believe that the best possible first investment from a LEARNING perspective would probably be a duplex. Less money coming in, less profitability, but simpler mechanical systems, fewer tenants to completely screw up with, more availability, and much more of an opportunity to learn the ins and outs of rental property investing.

Debt is...weird. Different people react differently to it. Again, from a purely logical perspective, it would be wisest to invest rather than pay off debt if the return on investment outweighed the interest on the debt. But for quite a lot of people, myself included, debt carries an excessive psychological burden. My mind plays tricks on me with it. I know why: a good part of my childhood was spent in poverty: food stamps, food banks, unemployment, creditors dunning is, power notices being posted at the door, hiding the car elsewhere instead of parking it in front of the house so it couldn't be repossessed easily. I'm not good with money and worse with debt.

I don't know if you're like me. If you are, either get rid of your debt or marry someone who's much better with money than you are and give that person the responsibility to sign off on the major financial decisions of your partnership. I chose the second options and it's worked for me.

Why don’t you live in a refrigerator box in the woods and really save lol geez man you make 6 figures and you’d would live like an animal just so you don’t rent ?

Don’t try to reinvent the wheel or play hero .just get a duplex and house hack the thing so you can maintain some integrity and dignity . You don’t want to be like cousin eddy from national lampoons Christmas living in a camper