Twins starting out early from Clarkston, Michigan

[Brent Gildner]

Hello all!

My twin brother and I, both 22, are looking to get into real estate starting this summer. We both have jobs in the auto industry that pay well, and would like to invest our savings. 

I'll start right off the bat with a question.  Which option of the 2 would those with experience advise we do.

Option 1: Purchase a home($120-$180K) with 20% down using a large chunk of our savings.  We have friends that will live in the house along with us and rent from us, however the rent they pay would cover the mortgage and insurance only. And then after a year or so, rent out that house to a tenant and move in to a different house with the same set-up.

Option 2: Rent a house for cheap with our friends. Approx. $400/month including utilities. This would free up much more capital that could be used to purchase multiple properties($40-$80K) at 10-20% down. We then flip those properties and either rent them out, or sell for profit.

Both sound like sound options to us, however we have very little experience in real estate, only some tidbits here and there of the few things our parents know.

I look forward to becoming more involved in the bigger pockets community!!

Brent

[Nick Watkins]

Perfect, just a quick suggestion then have 1 of you get the 3.5% or 5% loan on the rental with friends rent out the rooms and live free. The other one take out a FHA 203K loan to flip a house this way you can finance the repairs and only have to put down the 3.5% still keeping a cash reserve.

The more you can barrow and still cashflow = the more you can buy with todays low interest rates..