Newbie that’s in analysis paralysis

[Tanner Weaver]

Hello BP community!

I’ve started learning about real estate investing about 2 years ago and I’ve struggled to get past the first step in getting started. I’ve been debating going small such as a single or duplex just to get my feet in the water but would like to get into small apartment complexes. Here’s what I’m working with and any advice for my situation would be much appreciated!

I’m 23 and live in Minnesota but travel working on the Pipline throughout the mid west most of the year so self managing I could see being difficult. I have 70k saved up and should have about 100k by the end of the year. I was late in building credit with a current credit score or 661.

[Evan Kraljic]

There's nothing wrong with starting small to see how much you like real estate investing before committing to something like small apartment complexes. If you decided to househack a duplex for your first investment, you're getting exposure to real estate while the stakes are a lot lower (figure out what you like/don't like), probably save money on rent with tenant rent offsetting some of your mortgage, and you're doing this with a very small initial investment since owner occupying allows you to purchase for 5% down or less. That way even if you do decide apartments are the way to go, you haven't depleted much of your capital, which will be critical and probably the biggest hurdle for getting into a commercial asset, and you have at least some background in real estate that you can sell to brokers/lenders when they ask you about it. I'd definitely work on getting the credit score up, right now you'd probably have to go FHA to get a decently competitive interest rate which can limit the pool of available properties. Once you're in the 700 or 720+ range conventional can often become a better option. But definitely just talk to a mortgage lender on that and they'll set you straight.

Also, I see you listed Royalton as your location. If I'm not mistaken, I think @Daniel Anshus is from there and has helped some of his hometown friends buy there. He also invests in the twin cities and has a small apt building, so regardless of where/what you're looking to buy he'd be a good guy for you to connect with on what you're looking to do.