All Forum Posts by: Erik W.

I will be there. 

I know it's last minute but I will be there!

Thanks

Is there any such thing as a mortgage for two properties? I could purchase two turn key units for $160,000, maybe $150,000 with the right deal. They would potentially even be in the same building, then live in one and rent out the other.

I'm in a similar position as you and had similar thoughts about purchasing a duplex. The reason I am currently moving away from that idea is liquidity. I would see if you can find some information on how fast duplexes sell in your area. My feeling is that the first purchase should be something that would not be difficult to sell if you need to, but I am just starting out so don't take what I'm saying too seriously.

Although I'm interested in both commercial and residential real estate buy and hold investing, I felt that the ideal way to start out is by house hacking a duplex. As of late, I'm starting to think this may be a poor strategy for me.

After having watched the duplex market in my area for a number of months I have developed a new concern. I've noticed that the same duplexes in my area have been sitting for months without selling. I know duplexes are less liquid than single family residences, but this is a bit ridiculous. Being this would be my first purchase, the last thing I need is to get in a situation where I need to get rid of the asset and be stuck with it. In the future with more experience I would be more willing to purchase less liquid assets, but for right now I don't feel it's right for me. This is not set in stone, just my current view.

My other issue is what to do with myself. I used to live in a town about an hour from where I'm at now. When I decided to move back to my home town, I decided to move in with family due to some outside circumstances. Those outside circumstances have for the most part been resolved, and I am now wanting to live by myself. This makes things a little more complicated as I am not sure what to do with myself. This is another issue with the duplexes. In many cases the duplexes available in my area were run down and in bad parts of town. I would prefer not live in a place that has either of those two attributes. Regardless of property types I see two main methods to achieve my first property:

1. Purchase a place and move in:
   1. Pros: Gives me a new place to live right away and allows me to take advantage of an FHA mortgage.
   2. Cons: Delays my ability to rent it out by 12 months due to FHA restrictions. That one is not a huge deal, but something to consider. The bigger issue though is that even if I move out after a year and find a renter right away, I won't be able to get a mortgage on another SFR as I believe I would need around 12 months of income from my first SFR. I would rather not move back in with family, but renting while paying a mortgage is an expensive proposition.
2. Purchase a place and rent it out immediately:
   1. Pros: No waiting to rent out my investment property.
   2. Cons: No FHA loan, so much higher down payment. Stuck with family or living in a rental for 12 months. A long vacancy could put me in a financial bind if renting.

Do any of you have any suggestions on how to handle this situation? I'm not completely unwilling to rent or continue to live with family, but want to make sure I know all of my options. I'm also not totally against a room mate, but as of current I do not know anyone who I could room with.

I was looking at a piece of land some time ago that was in a great location next to a brand new manufacturing facility. It was going to create a ton of jobs and I imagine the area saw good demand then. The problem was it would have to be graded quite a bit. I have heard that is quite expensive.

That's a good point, I know the first place I'm going to contact. I know some people buy properties that are not doing well and fix them up. One of the reasons I was initially hesitant about buying a property in distress is that I was worried I would not have the skills to improve it, since I have no experience. What are your thoughts on this?

I appreciate your advice.

Thanks for the reply!

I'm not necessarily against partnering, especially if it can scale better that way. I just worry about some of the typical issues that can arise with partnerships. I need to do some research on the various ways to partner. Sounds like you have some upcoming plans, do you already know who you will be partnering with?

Unfortunately I don't think anyone in my family would be the type to invest in something like that. Most of my friends are my age and just starting out, so their wealth is limited. I would definitely be interested in having people invest with my intention to give them a return later.

If I don't go with storage, I do plan on at very least making a single family purchase for rental. Multifamily has always interested me too.

For quite some time I had wanted to get in to the self storage industry. My local market seems hot, my nearby facility just expanded and filled the new units quickly. I'm in the process of doing market research.

I am currently trying to find out if this is even feasible for me. I have no debt, low bills and no wife or kids. The main issues are start up capital and experience. I could put out around $20,000, possibly $30,000 towards starting the business, but that's about it. On top of this, I have no experience in the self storage industry. I feel that these challenges can both be overcome, but I am looking for advice.

My primary interest right now is in the storage container style storage facilities. I feel that with my low startup capital this would be a better model for me. I could buy properly zoned land, make any needed modifications required by state or local area, and only purchase a small amount of containers. Then I could scale as I go. There are no existing facilities for sale anywhere near me (I am in the Northern Illinois region).

There is one big city and multiple towns nearby. The city is seeing a population decline so I am hesitant to start anything there. We have a nice community north of us that has a high average income, as well as a high percentage of homeowners. There is a reasonable amount of competition, but nothing crazy.

Once I have more data and feel that this is feasible for me, the next step would be to get a third party feasibility study. Do any of you have any advice for me?

I appreciate it!