Starting out Conundrum .... Advice Sought.

[Nate Jones]

Hey All,

A couple months ago I introduced myself to this board. I mentioned that I was living in Chicago and thinking about doing some RE investing, rental properties. Since then I've been reading many RE books (so many books) trying to get a handle on what's involved. My next step is to start attending local RE Investing Clubs as soon as the new year begins.

That being said I would like any opinions on how I should go about starting because I see my situation as a bit of a conundrum. I'll give some details .....

I've been living in Downtown Chicago for a few years and I'm now paying $1000+ in rent. I currently have a total of $20K that I've put aside for REI.

On one hand I'm thinking that I should naturally try to get a multifamily property so that I can ideally escape paying or at least reduce my rent. That would free up more cash for investing. The problem is 20K isn't going to be a sufficient downpayment for much of a multi-unit property.

On the other hand I was thinking I can just move to a cheaper (yet safe) rental area myself and put my investment cash as downpayments into 1 or 2 SFH's that would cash flow. Of course that would mean I'm still throwing away money on rent,even if it's less than I do now. This would allow me to live in an area that I like and is convenient to my work while buying properties in areas where I can actually obtain a positive cash flow. Of course the cash flow would be offset by the fact that I'm paying rent but it would allow me to get in the game and start building a portfolio..

Any opinions will be appreciated.......