In need of some advice

[Christian Licata]

Hi, i'm 22 years old and looking to get started in real estate. Im trying to decide if flipping a home or buying a rental property is the best option for my first investment. I have a good amount in savings and I'm willing to put a down payment of up to $50,000 for a rental. The problem Im facing is that my job doesn't pay much. So I don't know if it makes much sense to buy a rental property for about 200k-250k, just to make a few extra thousand a year (based on a 5% return). Should I be looking at this as a goal to keep buying rental properties to build up my portfolio? Or should I focus on trying to make more money per year before buying a rental?

The second option would be that I flip a home. If I decide to do this I have a private loan in place that would be for 250k at about 6%. I also have a close connection with an experienced developer and is willing to help mentor/guide me through looking at homes and answering my questions. Also, do you guys think that buying a foreclose to flip would be too risky for my first flip? Any advice will be appreciated, thank you!

[Theresa Harris]

Do not flip a home unless you have experience.  It is vey risky and chances are you will lose money if you don't know what you are doing.  You say your job doesn't pay much, but what does that mean in terms of $ and being able to get a mortgage?

Do you own your own home at the moment?  Why not look at a duplex or place with a legal suite and you can live in one unit and rent the rest of the house?  You could also rent rooms in the house (if you don't mind having roommates).  Run the numbers to see how they compare to you renting.

You make money when you buy a rental-getting a good deal and buying the right property.  You also make money in the long run not through cash flow, but by the tenant paying down your mortgage for you and covering your expenses (property taxes, insurance, etc).