Purchase Primary Residence or Rental Property Investment First?

Question

Hey BP fam,

When you first started out in your real estate journey, did you purchase a home for your primary residence first or did you buy a rental property before you purchased your first primary home? My fiance' and I are getting into real estate, possibly may even house hack. But if we do not house hack, would you buy your primary home first and then look to invest in rental property second or would you start investing first and continue to rent for now and then buy a primary residence later down the line? Looking for some insight from others who have thought about this and the things to consider.

Account Closed · Answer

If I started over 10 years younger I would buy a house as a primary for the low down payment, fix up any issues it had over a year or two, depending on costs, and then move and repeat. Rent our your former home. Lowest down payment options vs a rental needing 20% down.

Cody Neumann · Answer

@Tyson Thurman

I bought a rental property first but if I did it again I would definitelystart out with a house hack brrrr and scale from there.

Dan Portka · Answer

@Tyson Thurman it depends on current living situation. If you're paying a lot in rent you can buy a house hack and considerably reduce your housing payment. that way you'll be able to save more money to invest.

Anthony Ocasio · Answer

@Bill Ward right on point

Chirag Patel · Answer

Tyson,

I am also in same boat, but i am family guy with kids so dont want to do house hack.

I am thinking to invest in rental property first and then by buy my own home.

Even in Rich DAD Poor DAD house is consider liability because you spend money on it but rental property is consider Assets as it bring money in your pocket.

Unless you buy home live in it for year and two and move out and rent old home.

Tyson Thurman · Answer

@Young Park I'm in a high cost of living area also lol I live in Los Angeles County (South Bay area near Long Beach). How has the out of state BRRRR process been for you? I am very interested in the BRRRR strategy as well and would love to hear about some of the ups and downs you've experienced with using this strategy out of state.Also, which area(s) did you choose to invest in if you don't mind me asking?

Tyson Thurman · Answer

@Rob Lee Did you utilize the FHA loan for your first primary? If so, did you end up refinancing out of it to use another FHA loan for the next? Curious to hear more about your process. I appreciate the feedback, thanks so much.

Young Park · Answer

It depends on where you live. I live in a high cost of living area so I've been renting and purchasing cash-flowing properties out of state using the BRRRR strategy. I would have to pay significantly more making monthly mortgage payments vs my rent. House hacking would be the ultimate strategy, but my wife isn't all for it, so we made the next best decision :)

Rob Lee · Answer

House hacking is an excellent idea. We turned our first home into our first rental property. It set the foundation for our financial independence. Even if you choose not to house hack for whatever reason, buy your primary and live in it for a year or 2 with a plan to save for your next down payment. As long as your spouse is onboard keep doing it until you get where you want to go. Each new home becomes a rental until you get tired of moving or reach your goal. Best of luck.

Rob

Purchase Primary Residence or Rental Property Investment First?

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