I'm wondering what options do I have to invest 150k in. I live outside the DC area and have never owned a home. The housing market is about $500 for homes and $250 for condos. How do I create a real estate portfolio? Is it better to finance a home or a condo? Would a one unit apartment or condo be worth 40% down payment to finance and rent it out. Or would it be better to buy a home and rent out a room or basement in order to finance the property? New to Bigger Pockets and looking for suggesions
Rental Property Investor · Hendersonville, NC · Member since 2016 · 446 posts · 412 votes
5y
@Miguel P. Pena - I would suggest you start with reading some books and listening to the BP podcast. There are a lot of different answers to your questions and its going to depend on your strengths, your goals and how much time you have.
In general, I would advise a house hack for someone starting out, either rent the basement, rent by the room, or buy a small multifamily and live in one unit. It helps reduce your risk and it works well in an expensive market.
Real Estate Agent · Vienna, VA · Member since 2016 · 289 posts · 253 votes
5y
Hi Miguel,
If you don’t own a home, I’d suggest to buy either a single family home or a townhouse and rent spare rooms and/or the basement. By doing this, you will eliminate all or most of your current living expenses and you’ll own an asset that will appreciate more than a condo would.
Financing a home, townhouse, or a condo is very similar. The main difference would be to finance a primary home vs. an investment property. If you buy a property to house back, you’ll buy it as a primary residence and you will have more loan options to chose from and your interest rate will be lower. If you buy an investment property, your down payment and interest rate will most likely be higher, also you limit your lender pool.
Seeing as your from the DMV area, how much capital would you put down on a $400,000 home. I live in Silver Spring and homes prices are similar to Alexandria and Arlington, respectively. I only have 150k and would like to spend it conservatively without blowing it all away. Due to the pandemic, what's your take on the housing market? And do you believe it's a good time to invest in the housing market?
Rental Property Investor · Hendersonville, NC · Member since 2016 · 446 posts · 412 votes
5y
@Miguel P. Pena - I would suggest you start with reading some books and listening to the BP podcast. There are a lot of different answers to your questions and its going to depend on your strengths, your goals and how much time you have.
In general, I would advise a house hack for someone starting out, either rent the basement, rent by the room, or buy a small multifamily and live in one unit. It helps reduce your risk and it works well in an expensive market.
Realtor · Columbus, OH · Member since 2016 · 170 posts · 227 votes
5y
House hack! Buy a 2-4 unit property, take advantage of owner occupied low down payment options usually 5% ish. Try to find something that you can add value to through minimal renovation while you live in it and gradually raise rents. Then in a year or 2 do it again :)
Thank you @David Fernandez, @Ryan Howell, and @Reece Iovine. I live close to DC and some of these multifamily properties are between 750k - 1 million +. I'm reading BP Rental Properties and trying to learn as much as I can. Thank you for the advice. Really appreciate that there are people like you guys on these forums giving out great advice! :)