Best way to use 25k to invest in real estate

[Johnnie Schneider]

Hey everyone, Im wanting to hear everyones best advice or strategy they would use for starting out with 25k cash. For some background info, I live down in South Florida so home prices certainly aren't cheap. Im willing to bet most people are going to say house hack, but thats not quite an option for me since I'll be living with my girlfriend and 2 dogs so ideally we aren't looking to have a roommate. I've considered out of state for my first investment property due to the prices being much lower up north, but then Ive had many tell me thats not the best option for it being my first property without experience. My other thought would be to use a FHA loan to buy a property here by me, live in it for a year and just eat the monthly payments myself, then cash out refi to a standard loan, rent out that property for hopefully some cash flow and do it all over again to continuously stack properties. Any thoughts or input is greatly appreciated!

[Tom Markey]

@Johnnie Schneider -- I'm not sure there's a right answer, but I'll offer my thoughts, and hopefully you'll get a variety of viewpoints in the forum.

I like @Tim Johnson's suggestion of saving up more money first because $25k is not a ton to work with, especially in south Florida.  If you don't want to wait, I would consider the following:

1. House hack a duplex or something with in-law quarters so you, your girlfriend, and the dogs have your own space.  

2. Buy a home with FHA or 5% down conventional financing in a market with short-term rental potential. Live there for a year, then move out and turn it into a STR. If you execute this well, you should have strong cash flow starting in year 2, especially if you can self-manage.

3. Do a BRRRR. Your $25k should be enough to get it done, though personally I would like to have more of a cushion in my personal reserves. This might not be a huge cash flow play, but recycling your capital (assuming all goes well) will allow you to buy more than one property with the $25k.

4. Look for seller financing opportunities where you can put 10% down, or less.

5. Embrace other no- or low-money down strategies and make your $25k go as far as possible.

If one of these options stands out to you, I would talk to a lender as a next step.  For example, some loan guidelines may not allow you to house hack a multi-unit property.  Feel free to reach out to my brother @Ross Markey, who is a loan processor at a well-known brokerage.

Best of luck!