1st time home buyer and planning to get into the Re game soon

Member since 2020 · 146 posts · 39 votes

Im located in Phx,Az got pre approved from my lender $285k, looking at ready move in or very few small head aches lol, homes in Phx and nearby (-40min away),already found many that fit my criteria just waiting to put an offer on the right one, im going a different route that most do here, i plan to live in the house 6 months to a year before i get another loan to get another single family house nearby, then rent out the one i currently live in, wash and repeat, do think this is a right fit for me, i come from a used car dealership background, in the past i would buy beaters that needed repairs , now days i buy vehicles that need little to no repairs, put up for sale and make profits.

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Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

2mo

People do that all that time it’s a proffered method, heck I used it 8 years in a row. And that’s the kicker. You have to stay in the home you buy for at least a year. (Assuming you are buying the homes as an owner occupant and not putting 20% down and paying higher interest as an investment property.)

You’re going to sign a document saying you intend to live there for a year if you’re getting the lower interest lower down payment owner occupant loan.

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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
2mo
People do that all that time it’s a proffered method, heck I used it 8 years in a row. And that’s the kicker. You have to stay in the home you buy for at least a year. (Assuming you are buying the homes as an owner occupant and not putting 20% down and paying higher interest as an investment property.)
You’re going to sign a document saying you intend to live there for a year if you’re getting the lower interest lower down payment owner occupant loan.
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G. Brian DavisPro Member
Investor · Hatboro, PA · Member since 2016 · 2k+ posts · 850 votes
2mo
Hey @Jimmy Rojas. The key, as you've heard, is living in the home for at least one year to satisfy owner-occupancy requirements for favorable loan terms. I'd focus on building a strong relationship with your lender and finding properties where you can genuinely add value through light renovations to maximize your equity and cash flow when you move out.
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Travis TimmonsPro Member
Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
2mo
Fantastic idea...the DTI hurdle going from 1 to 2 and 2 to 3 properties will likely make the process a bit longer than expected, but it is, by far, the easiest way to scale for most people.
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Tabish Masood
Investor · Sterling, VA · Member since 2026 · 89 posts · 48 votes
2mo
It sounds like your strategy aligns well with both your budget and your experience.

What you’re describing is essentially a live-in buy-and-hold approach. Living in the property for 6–12 months allows you to take advantage of owner-occupied financing, which typically offers better terms and lower down payment requirements than investment loans. After moving out, you can convert the previous home into a rental and repeat the process.

Coming from a used car dealership background may actually give you an advantage. You already understand buying based on value, evaluating condition, managing repairs, and knowing when a deal makes sense versus when it becomes a headache. The fact that you’ve moved from buying “beaters” to buying cleaner vehicles with fewer issues shows you’re focused on reducing risk and improving returns, which translates well to real estate.

My biggest recommendation would be to run the rental numbers before you buy, even if you plan to live there first. Ask yourself:
- Will this property cash flow or at least break even as a rental?
- Is the neighborhood attractive to long-term tenants?
- Could you comfortably qualify for the next loan while keeping the current home?
If the answers are yes, then your approach can be an excellent way to slowly build a portfolio without jumping straight into full-time investing. Starting with lower-maintenance properties also makes sense for your first few deals while you learn the landlord side of the business.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
2mo
Quote from @Jimmy Rojas:

Im located in Phx,Az got pre approved from my lender $285k, looking at ready move in or very few small head aches lol, homes in Phx and nearby (-40min away),already found many that fit my criteria just waiting to put an offer on the right one, im going a different route that most do here, i plan to live in the house 6 months to a year before i get another loan to get another single family house nearby, then rent out the one i currently live in, wash and repeat, do think this is a right fit for me, i come from a used car dealership background, in the past i would buy beaters that needed repairs , now days i buy vehicles that need little to no repairs, put up for sale and make profits.

Your plan is easier said then done.
In addition to the owner-occupancy requirements for mortgages, you're also going to run into either cashflow or acquisition fund issues.
Meaning, if you put less than 20% down, the market rents may not cover your loan payment + maintenance, vacancy, etc.
After you buy the first property, how quickly will you save 20%+ down for the next acquistion?
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