Seeking Advice on Real Estate Investing Strategy: First Property Options (RI)

[James Lawler]

Hello everyone,

I wanted to give you some background about myself to help guide your responses to my situation. I’m 22 years old and graduating this coming May. Starting in July, I will be making $80K per year in my full-time role, and I also currently work as a waiter on the side, which I plan to continue while working full-time. Additionally, I currently have around $50K invested, which I intend to leave untouched as I continue building my stock portfolio. My goal is to diversify into real estate while maintaining a solid nest egg in my investments.

With that in mind, I’m looking to get into real estate investing as quickly as possible. I’ve been researching different strategies, and it seems like house hacking might be the best fit for my current situation. However, I’ll be working in Rhode Island, so I’ll need to focus on properties either in RI or near the MA/CT borders.

After browsing sites like Realtor.com, I’ve noticed that most duplexes in Rhode Island are listed around $400K+, which led me to consider whether it might be more practical to buy a single-family home and rent out rooms (perhaps to people like college students or other renters). This approach seems like it could be more financially feasible in my case, but I’d love to get feedback from those of you who have experience with this strategy.

A few additional questions I have:

1. Loan Options: Given my circumstances, would an FHA loan or Fannie Mae loan be more suitable for my first purchase? What are the pros and cons of each in my situation?

2. Exit Strategy for Future Expansion: I’ve heard of the BRRR strategy and I’m curious about how to apply this to my future growth. What are the best ways to purchase a second property once I’ve paid down the mortgage on my first? Any insights into the process of expanding a real estate portfolio would be very helpful.

I’m eager to start my real estate journey and would greatly appreciate any advice, resources, or recommendations. I’m open to hearing about any other strategies that might be worth considering.

Thanks in advance for your time and expertise!

Best regards,

James