Looking to buy or fist House and use ot as an in to real estate investing
Tim BowmanPro Member
Member since 2026 · 4 posts · 0 votesLooking to buy or fist House and use ot as an in to real estate investing
10 Replies
- Member since 2026 · 25 posts · 5 votes1w
Congrats Tim, a live-in flip is a great way to start. A few things to check:
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.
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.
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.
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.
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.
- 1wDivin KanyamaBusiness MemberAccountant · Seattle, WA · Member since 2025 · 391 posts · 157 votes
@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. - Member since 2026 · 4 posts · 0 votes1w
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.
- Member since 2026 · 4 posts · 0 votes1w
Also, any recommendations on lenders would be helpful. Ive only tried a couple online for pre approvals. I do have a foundation in my city that helps out big with down-payments and what not, tho they are not a mortgage company.
- Member since 2026 · 4 posts · 0 votes1w
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.
- 1wDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
How are you researching the actual value of this property - please don't say, "the Zestimate" or "the seller"!
You need to do your own market analysis, and if YOU don't know how to do it, hire an agent.
Here's some other copy & paste info to consider:
______________________________________________________If I was starting out again with what I know now, I'd look to acquire a 2-4 unit property with an FHA 3.5% low-down payment mortgage.
I'd also look into using an FHA 203k renovation loan, allowing me to buy something ugly, thus unqualified for a standard mortgage, which would weed out a lot of competition and push the price lower.
To maximize my cashflow and gain landlording experience, I'd do STR and MTR in the other units, as well as the other bedrooms in my unit.
Since most cities won’t allow basement rental units, I’d consider finishing the basement, just well enough for me to live down there (cities don’t care if owner chooses to live in basement), so I could rent out ALL the units/rooms.
I'd save all my cash and look to refi the property in 1-2 years out of the FHA mortgage, so I could use it again if necessary. Depending on how close I was to having 20% equity in the property and being able to avoid PMI, I'd consider using some of my cash to pay down the mortgage when I refinanced. Otherwise, I'd save my cash for the next acquisition.
I’d also be posting on every social media platform and telling everyone I knew that I was looking for more real estate deals. I’d aim for low downpayment land contracts and lease options.
After refinancing out of the FHA mortgage, I'd evaluate if I wanted to repeat the 2-4 unit FHA 203(k) process again or if I had the 20% down to target 5+ units.
While still living in the property, AFTER the refi out of the FHA mortgage, I'd also explore securing a HELOC to tap my equity for emergencies.
Good luck with whatever you decide to do!
Logical Property Management4.9459 Reviews - Member since 2026 · 25 posts · 5 votes6d
Congrats on getting started, Tim. A few things to check before getting excited about "$60K under market":
Verify the market value yourself. Pull 3 sold comps (not listings) from the last 6 months, similar size and within a mile. If they really support ~$150K+, great. If not, the "discount" is just the listing price being high.
The well. Ask why it needs one (failed existing well or no water source at all?) and get the seller's agreement in writing with a completion date before closing. Also get a septic inspection if it's not on city sewer.
On the walk-through, focus on the expensive stuff: roof, foundation, furnace/water heater age, electrical panel, plumbing, windows. Cosmetic stuff is cheap; those aren't.
For loans that cover rehab, look at FHA 203(k) or Fannie Mae HomeStyle. Both roll repairs into a primary-residence mortgage.
If you want to sanity-check the numbers, I put a free calculator at getdealarchitect.com. Plug in ARV and repairs and it tells you the max you should pay. Happy to look over your numbers once you've walked it.
- 6dAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Tim, since this is your first property, I’d slow down and make sure you understand the entire deal before worrying about getting it under contract. The first thing I’d clarify is the actual purchase price, how much the seller is financing, how much cash you need to bring, and whether the loan you are considering can include the rehab costs. Those numbers can completely change whether the deal works.
For the property itself, I’d get an inspection and walk through the rehab with someone who understands older homes. You want to separate cosmetic work from the big items like foundation, roof, electrical, plumbing, HVAC, and any structural issues. I’d also get contractor estimates rather than relying on a rough rehab number. Since you plan to live there and eventually rent it, I’d analyze it two ways. First, what does it cost you to live there after the rental income from any rentable space? Second, once you move out, would the property actually work as a full rental at realistic market rent?
There is also a tax side to think about from the beginning. While you live in the property, the personal and rental portions can have different tax treatment. If you later convert the property entirely to a rental, you’ll want the improvements and other costs documented properly so the depreciation basis can be determined correctly. I would not make the decision based solely on being able to buy it below market. The rehab cost, financing structure, and eventual rental economics matter just as much.
Feel free to DM me, I’d be happy to send over our Turn Key Rental Analyzer so you can run the numbers before making an offer.
INVESTOR FRIENDLY CPA®5241 Reviews - Lender · Franklin, TN · Member since 2026 · 60 posts · 11 votes5d
For the rehab piece look at an FHA 203(k) or a Fannie HomeStyle loan. Both roll the repairs into one mortgage based on the after-repair value, so with sold comps at 190-220 you've got room, and the limited 203(k) is the simpler version if it's mostly cosmetic. Heads up on the well, lenders usually want a water test before closing, so make sure the seller has it in and tested before the appraisal. And since you'd live there first, a year of owner occupancy sets you up to rent it later without any issue.
- 5dSean DavoodianBusiness MemberLender · Glendale, CA · Member since 2025 · 14 posts · 4 votes
Hi Tim!
I just posted something very similar, check it out. Message me if you need anything!
https://www.biggerpockets.com/forums/49/topics/1303304-bought-his-neighbors-rental-with-basically-no-money-out-of-pocket#post_7282061
Rate Hero4.8958 Reviews
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