I’m new to the RE world, and have had a blast bridging my learning curve over the last year. My girlfriend and I are talking about getting married and then beginning our first real estate investment. For context, we have about 30k saved up, and are living in a hot market (Nashville). Here are some options we’re contemplating.
Purchase a single family home ($250 - $350) with an FHA loan in the Nashville market that could be modified for an additional tenant (renovate the basement, add an additional room for forced appreciation that we'd rent, etc.). I haven't seen many duplexes or triplexes in the area that don't need a significant rehab, or that are in our range, so it seems like SFH would be the most practical starting out.
Move into girlfriends apartment, pay $1,000 in rent, and begin investing in out of city/state SFH or MFH around the 75k - 125k price range. I’ve been looking more into the midwest area or local markets in Tennessee. With our joint income, we’d have about 40k a year to invest.
We’re pretty flexible people and don’t mind the lifestyle choice behind either option. With scenario 1, my concern is the opportunity costs that would come with purchasing a 300k home. Does it make sense to house hack a SFH during a peak market? I also know very little about the tax benefits, or lack of with each option. I’m trying to crunch numbers to see what would be more valuable an investment over a 30 yr period. I’d think the cash flow would be better with option 2, but would it be worth building equity in a home for the first investment?
Thanks for your advice.
As someone planing a second trip to Nashville in a year, the Short Term rental market seems lucrative there (lots of bachelor parties, weekend trips, etc). Maybe something else to look at as well?
@Taylor Cochran looks like your local market is pretty solid.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing