Which Strategy to start with

Question

Hello Everyone,

I am looking to start my real estate investing journey. I have about 50k of liquid money I have access to. I am a professional athlete and do not necessarily know which city I will be in next year. Ideally, I wanted to start with a house hack of a duplex or triplex. However, since I do not know how long I'll be in each city I now feel this is not the best strategy for me since the house would have to be my primary residence for at least a year. Do you think a fix and flip is a good strategy to get me in the game or are there better options for my situation? Or is a house hack still the best way to get started and I just have to wait until my job location is more stable?

Thank you,

Taylor

Jake Baker · Answer

@Taylor Davila

We do 20 Flips/BRRRRs per year in Jacksonville FL and we use a hybrid approach. It is also very hard to "perfect BRRRR" in general. We BRRRR 8-10 per year and the flips supplement the money left in the BRRRRs.

Nadeem Alamgir · Answer

I think the best strategy is to get your foot in the door with the least amount of risk on the first deal, which could be a turkey single-family or, depending on the area, a duplex.

This way you can start building those relationships you need and figuring out the systems you will use at scale.

Savannah Yingling · Answer

Hi Taylor! I agree with Emma, depending on your situation and timeline it might still be a good strategy for you. If you build a good team of experts to work with in the area, it should give you a better advantage when you have to leave for your next location. Goodluck!

Taylor Davila · Answer

Thank you for the advice!

Taylor Davila · Answer

Thank you for the advice! Yes, I think finding a mentor or other Louisville investors will be key.

Taylor Davila · Answer

Thank you for the advice!

Ian Hooper · Answer

Vamos Morados!!

Hi, Taylor. If I could start investing career over I would house hack, but your situation is much different than mine. I was a W2 employee in a fixed location.

How much time do you have to commit to the property itself? Training, recovery, and match travel must surely be time and energy-consuming.  Do you have the band-width to be a landlord?  Maybe you partner with a rehabber or wholesaler to build up your liquid funds.  I'm happy to share my experience with you, anytime.

Wale Lawal · Answer

@Taylor Davila

Given your situation as a professional athlete with uncertain future locations, a traditional house hacking strategy might indeed be challenging due to the requirement of making the property your primary residence for a certain period.Considering your liquidity and interest in getting started, a fix and flip could be a viable option. Here's why:Quick Turnaround: Fix and flips typically have a shorter investment horizon compared to long-term rentals. This aligns well with the uncertainty of your future locations.Liquidity: Fix and flips often require a significant upfront investment for renovations, but once the property is sold, you receive a lump sum return. This can provide liquidity for your next investment or accommodate potential relocations.No Residency Requirement: Unlike house hacking, fix and flips don't require you to live in the property, allowing you more flexibility.However, keep in mind the challenges and risks associated with fix and flips:Market Analysis: Successful fix and flips require a good understanding of the local market. Ensure you thoroughly research and analyze potential areas for profitable flips.Renovation Costs: Accurate estimation of renovation costs is crucial. Unexpected expenses can impact your overall return on investment.Market Timing: Flipping relies on selling at a higher price than your total investment. The real estate market's timing can significantly impact your profitability.Before making a decision, consider consulting with a real estate professional or mentor who has experience in fix and flips. They can provide insights specific to your target market and guide you through the process.Alternatively, if you prefer a more hands-off approach, you might explore real estate crowdfunding or consider investing in a real estate syndication where experienced professionals manage the process, and you can be a passive investor.Ultimately, the best strategy depends on your goals, risk tolerance, and level of involvement you want in the investment.

Adrian Lammersdorf-Scioll · Answer

The fix and flip strategy sounds great since you can refinance into a conventional mortgage with some equity, and not worry about making it your primary residence, or staying in it a year.  The only thing is you would have to do a hard money loan, or find a private money lender that will finance you.  You will also want to network with someone thats an expert that can help you through that so you don't end up losing money, or not being able to refinance.

If you do want to take advantage of the percs of putting low money down and doing a primary, you'll definitely want the advice of an experienced lender that can tell you your options if you might move in a short period of time so you don't get flagged for mortgage fraud.  I know a couple good ones that are investor friendly if you need.

Which Strategy to start with

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