First Time Investment Opportunity

[Josh Asselin]

Hello BP,

First post. First time buying an investment property. I’m 26 years old. I went to look at a 3 family home yesterday. My goal is to house hack a multi-family and then move out after 12-18 months when I am able to buy my 2nd property. 2 of the units are under lease agreements. 1 unit is vacant (which I would be living in).  On the tour yesterday, my agent and I noticed some settling in the floors in the top unit (vacant). The house was built in 1890 so it has field stone foundation and we noticed some joists in the cellar like they’ve tried to temporary solve this problem. Another concern I had was the unit I’d be living in is very tight. The bathroom ceilings were so low that I may not even fit in the shower. There are a lot of pros about the property including that it would be cash flowing approx. $600 per month if I were to move out.

I guess my question is how do you know when to take risk and when not to? What types of sacrifices should I be willing to make? Or just any general advice about buying your first property would be helpful. I have also seen a lot of negative posts on here lately about the real estate industry so just need some assurance this is still a good route to go.

This is also one of the first properties I’ve toured so I don’t want to jump too soon but I also don’t want to miss out on a good deal.

[Jake Forehand]

Quote from @Josh Asselin:

Hello BP,

First post. First time buying an investment property. I’m 26 years old. I went to look at a 3 family home yesterday. My goal is to house hack a multi-family and then move out after 12-18 months when I am able to buy my 2nd property. 2 of the units are under lease agreements. 1 unit is vacant (which I would be living in).  On the tour yesterday, my agent and I noticed some settling in the floors in the top unit (vacant). The house was built in 1890 so it has field stone foundation and we noticed some joists in the cellar like they’ve tried to temporary solve this problem. Another concern I had was the unit I’d be living in is very tight. The bathroom ceilings were so low that I may not even fit in the shower. There are a lot of pros about the property including that it would be cash flowing approx. $600 per month if I were to move out.

I guess my question is how do you know when to take risk and when not to? What types of sacrifices should I be willing to make? Or just any general advice about buying your first property would be helpful. I have also seen a lot of negative posts on here lately about the real estate industry so just need some assurance this is still a good route to go.

This is also one of the first properties I’ve toured so I don’t want to jump too soon but I also don’t want to miss out on a good deal.

Hey Josh, it seems like you are interested in real estate, but you may be a little confused. That's great, because many people never get started at all. Online research will only get you so far. If you haven't done so already, speak with several lenders. Figure out what you are pre-approved for, what they need to see from you, and what products would make the most sense for you. Did a contractor walk this property with you as well? A GC or inspector will have a better understanding of whether or not the sloping floors are an issue versus an agent. It is very commonly seen in older homes. How bad is it? Ask questions to experts in their field prior to buying anything. Walk the next property with a GC, have a conversation, and ask questions. Or just contact a bunch of them and tell them what you saw. Don't worry about missing out on good deals, just figure out ways to find more. There are a ton of properties out there. I'm happy to jump on a call with you as well. Good luck!