Saving for Investment Property vs Saving for First Home

[Ethan Shapiro]

Hi everyone,

I’m new to real estate investing and could use some guidance from this awesome community. I’m weighing whether to invest in a cash-flowing investment property now or keep saving for my first home. For context, I currently rent, and moving into a primary residence isn’t feasible unless an incredible deal pops up in my ideal area (unlikely right now). My goal is to find a property anywhere in the U.S. that generates positive cash flow to help rebuild my savings for a future home down payment.

I’m feeling a bit overwhelmed about where to start. How do I find properties, analyze deals, and know I’m getting a good one? I’m also nervous about market timing, will more inventory and better prices come soon, making today’s deals less attractive? Any advice on these points would be hugely appreciated:

1. What steps should I take to kick off my search and evaluate markets?
2. What metrics or tools do you use to spot a solid cash-flowing property?
3. How do you balance the fear of missing out on a deal now versus waiting for a potential market dip?
4. Any beginner pitfalls I should watch out for?
5. How do I get my partner on board to invest in real estate (and show them it's a good financial decision)?
   How can I get the extra motivation to get over being scared of a very big purchase?

Thanks in advance for sharing your insights, I’m excited to learn and take my first steps!

Cheers!

[Kerlous Tadres]

Start by picking a market with strong rental demand, job growth, and affordable prices. Focus on areas where cash flow is solid and properties are still reasonably priced. Use tools like the BiggerPockets Calculator or DealCheck to analyze deals, focusing on cash flow, cash-on-cash return, and the 1% rule (monthly rent = 1% of purchase price). Don’t wait for the “perfect” market if a deal cash flows well and fits your goals, it’s likely a good investment.

Common pitfalls include underestimating repairs, not factoring in all expenses, and buying in areas with high vacancy rates. To get your partner on board, share the numbers and vision for long-term wealth. To overcome fear, start small, analyze multiple deals, and take action even if it’s just practicing with deals to build confidence.