I was wondering how many of you guys owned a primary residence prior to flipping/rental properties and etc? For those who did not own a primary residences prior to REI, what was your experience. Thach Nguyen, a big real estate guru, said he lived with his parents first and invested in rental properties/house flipping. Has anyone lived in an apartment and did real estate investment or would that just be wasting money? Just wanted to know everyone's thoughts.
Hey @Terry Cu I did a blend of both using the house hacking strategy. I turned my primary residense into a 2-unit property. This is the best of both worlds in my opinion. You will want to take advantage of the low rates that come along with owning a primary residense.
@Terry Cu I did not own my primary before throwing my hat in the ring for real estate investing. We (a partner and I) were looking to buy a condo together and then rent it out after we moved out and moved along; however, we switched directions when I heard a BP podcast. We directed our search to our hometown in California, and bought a SFR there which has been cash flowing since Day 1. It was a great investment to be honest, and there are a good amount of investors I have met and known that have invested prior to buying their primary.
It has to be what you feel is your path, I heard that podcast with Thach and follow him on Social Media, he had a great path to get where he is today. He designed a plan and put it into place, which is what any investor should do. Put a plan into place and take action for their situation.
Our first home became our first rental property. Being homeowners allowed us to understand the cost of ongoing maintenance and repairs. We took good care of the house and were able to make upgrades a couple of years before turning it into a rental. The upgrades increased the marketability and allowed us to get top rent. Living in the house also allowed us to pay the mortgage down significantly. The property has great cash flow and rents easily. It was one of the best decisions we've ever made.
@Rob Lee I 100% agree. I've learned so much in the first year of living in a home and househacking. Househacking will significantly lower your risk, especially because you have to overpay right now to win a contract.
The winter storm this year was an extreme example that a lot of people did not know how to turn off their water main. Maintenance is something you don't really think about until you actually do it.
That can play into your calculations for repairs or capex.