Looking to buy or fist House and use ot as an in to real estate investing

Grand Rapids, Michigan
Real Estate Deal Analysis & Advice
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Looking to buy or fist House and use ot as an in to real estate investing

Tim BowmanPro Member
Member since 2026 · 3 posts · 0 votes

Hi, my name is Tim. My fiance and I are looking to buy our first home, but also try and use it to our advantage to get into real estate. We found a possible deal on a 3 bed 1 bath. We can get it for around 60k under market. Seller will also put a well in. We haven't gone to look at it yet, planning on this week. It doesn't seem to need much done to it. Wondering if it sound like it could be a good idea to fix it up while we live in it, then either sell or refinance and rent it. Its listed at 150k, seller will take 100k, and put the well in. Im thinking we could pay closer to 90k. I am pre approved no problem for that amount, but wonder what loan option i should look into that will also cover the rehab. Seems like it could be a deal to me. I just need to know what exactly i should look for while checking it out. Obviously this will be my first one, so dont know how to analyze it. If anyone is willing to provide some assistance, id be more than grateful. Also, if theres anything else u need to know to better assist, feel free to ask. Thanks in advance.

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  • Victor Ramirez
    Member since 2026 · 14 posts · 0 votes
    10h

    Congrats Tim, a live-in flip is a great way to start. A few things to check:

    1. Verify the "60k under market" with SOLD comps, not list prices. Look for 3 sales within about half a mile in the last 6 months, similar size and beds/baths, in the condition yours will be after the fix-up.

    2. The well is the big one. Get in writing who drills it, the permit, and that the price includes pump, pressure tank and a passing water test. Also check whether the house is on septic and get it inspected. Wells and septic are where small budgets blow up.

    3. At the showing, walk the Big 7: roof, HVAC, electrical panel, plumbing/water heater, foundation, windows/exterior, and kitchen/baths. Those decide your real rehab number.

    4. For the loan, ask your lender about an FHA 203(k) or Fannie Mae HomeStyle loan. Both roll the rehab into the mortgage on a primary residence.

    5. If you live there 2 of the last 5 years before selling, the gain may be tax-free under Section 121. Worth asking a CPA about, since it can make "live in, then sell" very attractive.

    Once you have ARV and rehab numbers, run the 70% rule (ARV x 70% minus rehab) as a sanity check even though it's your home. If you're buying near that number, you have a lot of room for mistakes.

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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 323 posts · 109 votes
    9h

    @Tim Bowman , this could be a promising opportunity, especially if the purchase price is truly well below the home’s after-repair value. Just be careful not to treat the listing price as proof of market value. Before making an offer, compare recent nearby sales of similar homes and estimate what the property would realistically be worth after repairs.

    During the walk-through, look beyond cosmetic updates. Pay close attention to the roof, foundation, electrical, plumbing, HVAC, septic system, permits, drainage, and the details of the proposed well installation. A professional inspection and written estimates can help prevent a seemingly small project from turning into an expensive surprise.

    For financing, ask lenders about renovation options such as an FHA 203(k), Fannie Mae HomeStyle, or another purchase-and-renovation loan. The best fit will depend on the property's condition, your down payment, the scope of work, and how long you plan to live there. Also confirm that the appraisal and loan terms will recognize the seller's well contribution.

    Finally, run both exit strategies before buying. If you sell, include renovation costs, closing costs, holding costs, and potential taxes. If you refinance and rent it, confirm the expected rent will comfortably cover the future mortgage, taxes, insurance, maintenance, vacancy, and management. If the deal still works with conservative numbers and a repair cushion, it may be a strong way to buy a first home and begin investing. You’re asking the right questions—take your time with the due diligence and let the numbers guide the decision.

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  • Tim BowmanPro Member
    OP
    Member since 2026 · 3 posts · 0 votes
    9h

    I've been working for a real estate investor that rehabs his projects himself. Been learning a lot from him. Hoping I can get him to look at the house with me and help me figure out rehab costs. There are a few houses that are pretty similar that have sold between 190 and 220. So I think if I get the rehab number right, im moving in the right direction. I could redo all of the bedrooms myself. All the paint and smaller stuff as well. Could also just pay for materials for the roof and do that myself. If inspection goes well, and i do end up gettimg it, do i get bids from contractors and submit them to my lender? If i get to that point that is. I honestly have no clue in which order to do any of the things that are involved with buying a property this way. Let alone buying a house at all. Don't want to get my hopes to high, just feeling like all the work and studying I've been doing might be starting to pay off. Im at the action phase, but need to make sure I dont start off with a terrible deal.

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  • Tim BowmanPro Member
    OP
    Member since 2026 · 3 posts · 0 votes
    9h

    Btw, so so glad I didn't go into debt with Nate Bargers BRRRR Academy, and discovered this place. Been listening to Brandon Turners books on repeat, and decided to join Bigger Pockets.

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