New Real Estate Investor Looking to Achieve Financial Independence :)

[Sebastian Robles]

Hello everyone! 

I'm Sebastian, Puerto Rican born and raised. I entered my 30's this year, work in management consulting, I'm passionate for soccer, music, and all things personal finance. I began my personal finance education back in 2020 when COVID quarantine hit and I had nothing else to do. I grew up in a below average household and while I was taught good discipline on saving money, at the time I knew literally nothing about personal finance or budgeting other than "save for a rainy day". I realized I wanted to live a life where money is not something I need to worry about to survive.

I initially began learning about the stock market; what it was, how it worked, types of securities, etc. Dabbled a bit in day and options trading, and while I was overall profitable I quickly realized it was not sustainable for the life I want. The more I learned, the more curious I got. Explored a bit about taxes, credit, types of bank accounts, even the diabolical "due date advancement" trick on the student loan system here in the US. I learned simple and little things like opening a HYSA, automating contributions, dollar cost averaging into my investments, etc. to get me going.

It's been a few years and I have met my first milestone. While my strategies are working, I am ready to take on my next step. I want to accelerate my journey to financial independence and came to my second realization; I want to live a life where not only I don't need to worry about money, but I want to own my own time to do what I want whenever I want, and real estate is the next logical step for me. I have been learning, reading, and listening podcasts about real estate investing. While I don't feel particularly savvy yet, nor have I invested or bought any properties to my name, I feel closer to doing so.

One big trait about me is that I am a methodical person. I am currently in my learning phase. I am closer to understanding the basics of the different RE investing strategies, and have determined house hacking is the one I will begin with. This learning phase doesn't really have a deadline, but I am closer to the next one which is planning and roadmap. I am at the stage where I can seriously start to consider networking, looking at listings, compare deals, etc. 

I know plans and timelines are always changing and we must adapt, and that failure is part of the learning process, but I like to minimize that possibility by preparing as much as I can. As for what I'm trying to do: 

1. Pre-qualify for an FHA loan
2. Buy my first house hacking investment property in 2026 (multi family, house + basement, or house + dwelling unit. 
3. I am open to renovating if the numbers make sense.
4. Considering areas like colleges or hospitals to ensure tenant are easy to find (students, travel nurses)
5. Live in one space, doesn't have to be the fancier one as I want to maximize cash flow. 
6. Rent the other space(s), hopefully cash flowing enough to cover mortgage and some additional profit.
7. Live in the property for 1 year to meet the FHA requirement.
8. Wondering if refinancing here would make sense if natural and forced appreciation makes sense to get a second property?
9. Live in the property for another year (2 years total) to qualify for the 2-of-the-last-5 years capital gains rule.
10. I would track expenses, setup sites like cozy for auto rent payments, depreciate the property in tax return, etc.
11. After the two years I will be at a decision point; keep it for continuos cashflow or sell for appreciated profit. 
12. If I sell, I would take the profit and take another FHA loan for another multi family and repeat the process.
13. If I refinance, I would take a conventional loan instead and repeat the applicable steps.

I joined this website in the spirit of finding a like-minded community from which I can learn from and learn with. As for what I am looking to learn more about it's studying my market, defining my metrics, building my team, finding and analyzing good deals, offer negotiation and closing process, and maybe even on self-managing as a landlord for my first investment. 

Really excited to start my REI journey soon!

[Jay Hinrichs]

Quote from @Drew Sygit:

You've got a pretty good plan already!

Recommend you use the FHA 203(k) rehab loan to buy a 2-4 unit that needs work.

You'll get a better price and can create your own appreciation via the rehab.

Ref i out of the FHA ASAP though, because you'll need to live in the property for 12 months AFTER the refi to meet the owner-occupied mortgage requirements.

Then repeat the process.

Wouldn't worry too much about the 2/5 years Primary Residence capital gains avoidance. Once you have several cashflowing MFRs, you can 1031x them into a larger apartment building.

this is a nice goal.. but do have some reality everyone worries about money all through their life RE does not take money worries away if anything it increases them.. Along with time it does not decrease your time it increases your time working.  Now granted your working for your own portfolio which is really great. But there seems to be some illusions or delusions that real estate just runs itself and one can live like they inherited 10 mil bucks in a few short years. Nothing can be further from the truth I know it sounds great in all the feel good books but it simply is not reality for 95% of investors. Along with starting where your starting its a loooong game set up realistic expectations so you stick to the plan for a few decades and you will get what most in the bizz have  and that is NET WORTH.. forget about your own time and all that BS  its a lifestyle and it includes LOTS OF EFFORT