Investing before having own home of own

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Investing before having own home of own

Barshay Graves
Investor · Vineland, NJ · Member since 2013 · 113 posts · 18 votes

[b]Should I invest in a rental property before having home of own. I'm a recent college grad still living at home

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Brandon TurnerPro Member
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
13y

Hey Barshay Graves welcome to BiggerPockets! This forum is used to share a little about yourself - so what's your story?!

As for your question - Leon Yang wrote an awesome post about this the other day. Check it out:

Investing in Real Estate Before Buying Your First House?

I don't think it's a terrible idea, but I'd say - if possible - combine the two into one by purchasing a duplex or triplex or quad!

Podcast Guest on Show #92
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  • Simon W.Business Member
    Real Estate Consultant · Lehigh Valley PA & New York City · Member since 2013 · 1k+ posts · 676 votes
    13y

    There's no right or wrong answer. Best way is to plan everything out. You can definitely go for your rental property first before you owning your own house.

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  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    13y

    Hey Barshay Graves welcome to BiggerPockets! This forum is used to share a little about yourself - so what's your story?!

    As for your question - Leon Yang wrote an awesome post about this the other day. Check it out:

    Investing in Real Estate Before Buying Your First House?

    I don't think it's a terrible idea, but I'd say - if possible - combine the two into one by purchasing a duplex or triplex or quad!

    Podcast Guest on Show #92
    1Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    13y

    IMHO, its fine to buy rentals before buying your own house. There are many areas where renting works out to be a cheaper way to put a roof over your head than owning. And, it gives you flexibility if you're not sure you'll stay in the area.

    You say, though, that you're living with your parents. That's more complex. Are you paying rent to your parents? Buying your own food? If so, then go ahead and start accumulating cash and investing. OTOH, if you're living off your parents, then I think your first priority is to support yourself. How do your parents feel about this? Are they perfectly willing and financially able to support you? Or, does this create a burden? I've seen situations where parents neglect their own future to support their adult children and then the kids take advantage of the situation. Don't fall into that situation.

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  • Jeff S.
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    13y

    That is a fine idea especially if you can live cheaper somewhere else, parents, girlfriend, a little room or what have you.

    Just realize your debts may get in the way of buying a home, although you can always move into a rental if need be.

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  • Barshay Graves
    OP
    Investor · Vineland, NJ · Member since 2013 · 113 posts · 18 votes
    13y

    As per request, here's my story....So Im a recent college grad been out of school a little over a year. Currently not working in my field as I am a restaurant manager. The money is ok; for now...That is why I am very passionate about getting into real estate investing and starting my journey towards financial freedom. I really want to buy a duplex as my first investment (owner occupant) but have been having throughts of buying a stable college rental instead. @Brandon Turner

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  • Barshay Graves
    OP
    Investor · Vineland, NJ · Member since 2013 · 113 posts · 18 votes
    13y

    @jon holdman I support myself and help my parents w/bills. So the money they are receiving from my will go towards setting my own foundation that is why the Duplex Owner Occupant seems like the best route just been getting more confused the more research I do and ae I continue to look for deals...As I will likely try to get an FHA loan to start out..

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  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    13y

    Understand that buying a residence in any manner, may and probably will keep you from qualifying for various high loan to value first time home buying programs. And, such programs are also avaialbe to 2-4 unit properties which would put you in your own home and in the investing business at the same time! Good luck...:)

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  • Liz Brumer-Smith
    Specialist · St. Petersburg, FL · Member since 2013 · 114 posts · 49 votes
    13y

    Barshay Graves, I'm in the exact same position currently. My boyfriend (and business partner) and I currently live in a small apartment and want to take advantage of the low mortgage rates and low prices. We also hate the fact that we're building someone else's wealth when we could be paying into our own equity.

    The predicament is, if we use our money for a downpayment it takes away from a potential investment. We've decided to invest now and wait to buy a home. Our mindset is to create wealth before we spend it. If the right home comes along we're not going to pass on it, but building my wealth is my first and foremost concern.

    Please let me know what happens! I'm interested in seeing what path you take and what opportunities present themselves to you. :)
    Best of luck!

    Liz Brumer

    1Reply
  • Barshay Graves
    OP
    Investor · Vineland, NJ · Member since 2013 · 113 posts · 18 votes
    13y

    @liz brumer I will definitely keep you updated on my progress and I wish you success in whatever you do embark on!

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  • Barshay Graves
    OP
    Investor · Vineland, NJ · Member since 2013 · 113 posts · 18 votes
    13y
    Originally posted by Barshay Graves:
    @lisbrumer I will definitely keep you updated on my progress and I wish you success in whatever you do embark on!
    0Reply
  • Renae Bliss
    Involved In Real Estate · Milwaukee, WI · Member since 2009 · 124 posts · 7 votes
    13y
    Originally posted by Brandon Turner:

    I don't think it's a terrible idea, but I'd say - if possible - combine the two into one by purchasing a duplex or triplex or quad!

    But for someone who is primarily renting due to lack of money/credit, how can you do that in these circumstances??

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  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    13y

    Renae Bliss -Good question! I think the minimum qualification for an FHA loan is in the low 600s - which I believe anyone can get to with a few months of hard work and proper bill paying. I mean, even someone with a bankruptcy can get a 600 after a year or two. You just have to want it! There are lots of books on credit repair, so I'd start with that - find the highest rated on Amazon and study them! As for money - FHA requires just 3.5% down. So, if you can find a small multifamily for, let's say, $200,000 you'd only need around $10,000 total. So, again, if someone wants it bad enough, I believe $10,000 is achievable within a short time by hard work (And a second job!) It might not be easy for folks, but if someone wants it bad enough - they'll do it! My 2 cents anyways!

    Podcast Guest on Show #92
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  • Renae Bliss
    Involved In Real Estate · Milwaukee, WI · Member since 2009 · 124 posts · 7 votes
    13y

    Well, due to my health issues, making money/saving money has been quite a challenge. I haven't had a hourly-paying job since 2007, been a college student since 2008, and a Realtor since 2011.

    That is why I'm looking to possibly network & use MY skills to help others do deals; then take the money I make from THAT & put it where it matters!!

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