First Property - Which of these 3 Options Should I do?

[Graham Lemly]

Hey everyone, I’m a new investor ready to get my first deal and wanted other opinions on several different directions I could go with my first purchase.

My Goals: start out with a focus on LTRs with SFHs, self-managing and beginning locally in Memphis. I would like to have at least a couple properties before moving out of state that will at minimum break-even on cash flow as a LTR with property management long-distance.

Other info:

• Looking to move out on Memphis with my wife in the next 2-4 years
• Looking to start a family in the next year or so
• Comfortably have ~50k ready to invest sitting in HYSA, excluding Cash reserves
  • Have an extra ~$70k in stocks
• Most interested in A- to C+ neighborhoods
• I currently own & live in a 2/1.5 Condo locally (3.5% interest rate)
  • Not allowed to rent it out
• HOA fees have risen to where PITI + HOA = $1100/mo.
• Have ~$100k trapped equity, good zip code I could sell quickly

Option A: Purchase another primary home locally I could live in for 2 years (lower interest rate), with intention of eventually converting it to LTR when I move out of state. Idea is I could "trade-up" houses, get some trapped equity out of condo, and eventually keep this in my portfolio long-term, for a similar PITI. Then I could start purchasing regular investment properties.

Option B: Find an investment property first (higher interest rate) that pencils out while continuing to live in my condo, and then find another primary I could “trade-up” for with my condo, where I could eventually use it as LTR

Option C: Just focus on finding investment deals that pencil out at a higher interest rate with existing cash, and when I eventually move out of state, sell Condo. This may potentially require a HELOC or something similar if I don't have enough cash left for deal #2.