Dream property, or real estate?

Question

I am 27 y/o and have one house hack currently. I am working on saving and potentially buying my next property. I want to scale my portfolio and have been focused on my next deal. Today a dream property with a shop came up for sale, I'm wondering if I buy the property(to eventually build on) for myself or if I should wait and buy another rental property to get ahead. I'm afraid this property for myself would slow me down.

Andrew Postell · Answer

@Keaton Vols just because you buy something doesn't mean you are slowing down. Plans change and so do goals. I will say that building is usually a little (maybe a lot) harder than most people think. But in a forum setting it might be a little hard to know EVERYTHING about your finances, career objectives, relationships, etc. So, it might be hard to provide concrete advise so maybe I'll just say to trust your instincts on it. If it's a great deal, you'd be really exited about it, right? The fact that you already have reservations...again, hard to say but your instincts might be telling you something.

Hope all of that makes sense.

Jo Bradley · Answer

If it is truly your dream house, find a way to buy it. There will be hundreds of opportunities to buy rental properties in the future but how many dream houses will you come across? I bought my first two homes in the same month. The reason I did that is I bought a starter home directly from our landlord. We really hadn’t been shopping for homes but this seemed too good of a deal to pass up. A few days after closing, I found out belatedly that a house that I loved had been foreclosed on and was going to be auctioned in a few days. I had paid cash for my first home (thanks to the dot.com boom) so I just went to the bank and took out a small home equity loan for the earnest money and closing costs. I remember it being very easy to do. We took out a VA loan on our new home so the down payment was negligible. We rented out our starter home and it was the best decision we ever made. It was a great neighborhood for my kids to grow up. I still love my home today and would have regretted missing that opportunity. Besides, if you are an active participant in your rentals you would still be making an investment that would benefit your real estate future. If you are like us, you are going to need that shop to store your rehabbing tools. Lol.

Matthew Irish-Jones · Answer

@Keaton Vols if you are married with kids you have to loosen the purse strings a little and provide.

If you are single and hustling forget the dream house for now.  If you make good investments your equity will compound and what you thought was your dream house will look like a shack by the time your 40.  If you have no plans to have a family then just buy it, you will be rich anyway without a bunch of dependents sucking the wealth out of you LOL.

Keaton Vols · Answer

@Andrew Postell makes total sense. Thank you!

Dream property, or real estate?

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