Should I buy an investment property before my first home?
Member since 2022 · 3 posts · 1 vote
Should I buy an investment property before my first home?
Most Popular Reply
Patrick AllenBusiness Member
Realtor · Tucson, AZ · Member since 2014 · 241 posts · 139 votesQuote from @Andre Vasquez:
She just wants to have her dream home first, which is understandable.
Between being a poor tenant and owning one's dream home includes the Starter Home, a number of move-up purchases over several decades of raising a family, and THEN you get to buy your dream home with the equity and cash flow you've accumulated owning assets & working to generate active income at your job or business you own.
Doing a house hack on a MF property is a fantastic starter home move, probably the mathematically best option, but the least comfortable. You could also do a live-in flip: buy a fixer upper with a low down payment & do much of the work yourself, then sell after 2 years in such as way that is tax-advantaged.
It also counts to buy a more traditional SFR which would work as a rental and makes the wife happy for now... Live in it for 12 months, then you buy your next starter home/future rental with another FHA loan in 2023. Now your 2022 purchase becomes your first true rental, already underwritten to make sense as a buy & hold.
Or just buy the home your wife likes for now and help introduce her to the community in other ways... better luck next year!
10 Replies
- Investor · Member since 2019 · 10 posts · 15 votes4y
Andre, normally I would say getting and FHA loan (3.5% down) and buying a multifamily to owner occupy would be a great option. You could live there for a year and then buy your forever home. In your case, I am not sure your wife would go for it. However, I would say that just because you purchase a home to live in does not mean the banks wouldn't lend to you for an investment property. They most likely will still allow you to get a loan on rental property.
- Real Estate Agent · Orlando, FL · Member since 2022 · 7 posts · 6 votes4y
Hey Andre,
I think the important thing here is to get on the same page with the wife. From what I understand, you want to house hack and she doesn't or she doesn't want to get involved with investment properties at all and wants to only have one home?
Do you think if you laid out a plan for her of showing how house hacking sets you up to have a larger home in the future/faster? Set the "goal" to be you dream home and see how much faster you can achieve that through house hacking. Not sure, but it might help!
- Member since 2022 · 3 posts · 1 vote4yThat seems to be the main piece of advice im getting, and one that I really want to go for. Ill likely have to explain to her the benefits of doing this. thank you for your advice!
Quote from @Jordan Spaans:
Andre, normally I would say getting and FHA loan (3.5% down) and buying a multifamily to owner occupy would be a great option. You could live there for a year and then buy your forever home. In your case, I am not sure your wife would go for it. However, I would say that just because you purchase a home to live in does not mean the banks wouldn't lend to you for an investment property. They most likely will still allow you to get a loan on rental property.
- Member since 2022 · 3 posts · 1 vote4yShe just wants to have her dream home first, which is understandable. I think laying out a plan would help yes. Im getting myself educated currently so that i can explain to her the benefits of doing this. I appreciate your response!
Quote from @Drake Shadwell:
Hey Andre,
I think the important thing here is to get on the same page with the wife. From what I understand, you want to house hack and she doesn't or she doesn't want to get involved with investment properties at all and wants to only have one home?
Do you think if you laid out a plan for her of showing how house hacking sets you up to have a larger home in the future/faster? Set the "goal" to be you dream home and see how much faster you can achieve that through house hacking. Not sure, but it might help!
- Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes4y
Quote from @Andre Vasquez:
Hello everyone!, Im new to bigger pockets with aspirations to get into the real estate investing world.
Like the title states; im a first time home buyer and real estate investor that will be in the market for a new home within the next 6months. I have no idea how to go about getting started however, I have a wife that wants our first home to be our only home, but I know that will make it harder for me to buy more properties in the future since the house wont be cash flowing.
I'm looking for advice on how I can get started in real estate investing while still being able to own my own home, with options to get more properties.
Any advice or ideas would be lovely!Hi Andre,
I had my wife read the book “Rich dad, Poor dad” by Robert T. Kiyosak this really helped us get on the same page. We moved over 10 times in our first 5 years of marriage although it has been worth it every time. There is many ways to go about RE, I have some friends that buy a single family and still invest. I have other friends that rent and still invest. I think you have to decide what will be the best way for you and your wife to achieve your goals and are you on the same page about that.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes4y
How long have you been married and what's the chances of divorce if you get the investment property first?
It depends on the life you and your wife want to lead. If you want to be wage slaves, beholden to your things and slogging away at a job you like or hate but doesn't matter because you have to keep going, then buy the dream house first. If you want a chance at having the freedom to do whatever you want while you're still young enough to do it, get the investment house first.
Your wife has it upside down. Don't know how old you both are but you look young in your picture. Your "dream house" is something you work towards, not something you deserve out of the gate. Get some investment properties and you'll have yourself and your properties all working towards the same thing instead of just you.
Read "The Millionaire Next Door". You'll find the most common trait of millionaires is the ability to defer gratification while a sound financial foundation is being built.
Skyline Properties - 4yPatrick AllenBusiness MemberRealtor · Tucson, AZ · Member since 2014 · 241 posts · 139 votesI will *politely* push back on this one: it is not reasonable nor usually feasible to buy one's Dream Home as their first purchase. As a millennial myself, I think our entire generation needs to get out of the mindset that we deserve a home as nice or better as the home we grew up in: usually a median-priced move-up home our parent's bought 10-20 years into their working careers.
Quote from @Andre Vasquez:
She just wants to have her dream home first, which is understandable.
Between being a poor tenant and owning one's dream home includes the Starter Home, a number of move-up purchases over several decades of raising a family, and THEN you get to buy your dream home with the equity and cash flow you've accumulated owning assets & working to generate active income at your job or business you own.
Doing a house hack on a MF property is a fantastic starter home move, probably the mathematically best option, but the least comfortable. You could also do a live-in flip: buy a fixer upper with a low down payment & do much of the work yourself, then sell after 2 years in such as way that is tax-advantaged.
It also counts to buy a more traditional SFR which would work as a rental and makes the wife happy for now... Live in it for 12 months, then you buy your next starter home/future rental with another FHA loan in 2023. Now your 2022 purchase becomes your first true rental, already underwritten to make sense as a buy & hold.
Or just buy the home your wife likes for now and help introduce her to the community in other ways... better luck next year! - Member since 2019 · 7k+ posts · 4k+ votes4y
the best investment is your own primary. dont buy rental if you are sill renting.
- 4yScott TrenchPro MemberRental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
I believe there is a huge advantage in buying a rental property, or even better, a house-hack, PRIOR to buying your long-term primary residence. The full advantages of this in my personal case can be best explained in this article:
- Investor · Colorado Springs · Member since 2021 · 58 posts · 39 votes4y
Your best bet is getting your wife on board with your idea, and the best way to do that is through education and mindset. Of course she wants the dream home first, who wouldn't? But there is gratification in investment success that far outweighs the "dreamhome" mentality, your peers will see you making sacrifices that will enable your "dream lifestyle" and your once thought dream home will have no comparison to the home you could potentially acquire through making smart decisions early. I recommend house hacking, and dreaming bigger!
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