First real estate purchase is a rental?

[Kevin Tunnell]

Hey guys, looking for some advice here. Where I live in California, it just simply isn’t realistic to buy anything with the salary I make currently. I live at home rent free and I know I want to get into the real estate game ASAP especially while interest rates are low seeing as they may rise soon. I was looking into purchasing OOS, particularly in the Georgia/Tennessee area.

My question: 

Is it frowned upon by banks or loaners to have my first purchase as a rental OOS? Or would it be okay considered my down payment would be well over 20% and the total loan amount would be less than my annual salary because of the cheaper real estate? 

[Tim Johnson]

Lenders won't frown because your first purchase is an investment property. They're interested in qualifying you and your financials as well as the property. 20% (or more) downpayment on a conventional loan for an investment property would be fine - as long as you qualify.....

but because of the higher downpayment and interest rates for a loan like this - most investors DO begin their investing through househacking a primary residence with a lower downpayment and better interest rates. In your case, Georgia or Tennessee might be just the ticket...