Strategy years 1-5

[Bennett V.]

BP,

I am just getting my start in real estate investing with the intention of it becoming my full time career within 3-5 years from now.  My current living situation is living in an apartment with my long time girlfriend which we rent for $1100/month.  I have almost no money to put down on a property but may have an investor willing to put down $15k-20k this summer.  We just renewed our lease until June of 2017.

I had the idea that house hacking may be best for a duplex but my other half is not excited about that option yet (although I am working on that).  In my area I can get a decent duplex for between $100k-$130 which would bring in at least $1450 in total rent from the 2 units .  I could get cash flow running on this property using the investor for a down payment.

After this, my second move would to get an FHA with 203(k) on a SFH within a year from now while I have cash from from the first investment. This would still keep money down on the low end but give us a house that we can remodel and eventually live in. While keeping the first duplex, I would eventually flip the SFH to buy a more permanent home for us. If I was renting the apartment that I am in now, can I do a 203(k) if I have not "officially" moved into the house until construction is complete in it?

I would keep a large portion of money from the flip to invest in the next 2-4 unit rental.

Any ideas on this starting strategy?  It would allow me to use investor money on the rental while keeping my personal investment low on our "first home" and give me the option the flip that house to create more cash for future DP.

Any better ways to use the investor money since a house hack is not a foreseeable future?

Thanks in advance! 

[Elizabeth Schellhammer]

wow! this was exciting to read. @Bennett V., your plan seems solid, and I believe you will reach your goals if you follow this diligently. 

What I am shocked about is how you are considering the future with your girlfriend based on what others are saying on the internet. Yes, it is important to have a partner that understands the vision and wants the same things you do, but I have to wonder if you and your girlfriend are having problems outside of your investment plans for you to quickly reconsider this long term relationship.

Perhaps it's not the idea of investing that is causing her distress but your approach in presentation. If you want this to work, I would suggest explaining it to her in terms that will get her as excited to get started as you are. Does she want to eventually have children and be a stay at home mom? This could lead to the financial freedom to do so. Does she have a hobby that she would like to spend more time doing? Does she have a dream of opening a bakery or a boutique but doesn't see how she will ever be able to do so? Does she want to travel? In a lot of ways, us humans, are selfish creatures and we need to see how an idea will benefit us directly. Perhaps you could explain to her how sacrificing now will give her the freedom to be bigger and better in the future and just maybe this will change her perspective.

I wish you all the luck, I sense that you will succeed with or without your girlfriend. I am excited to see how things unfold for you. Keep us updated, as now, I think we feel invested in more than just your business strategies.

Have a great day!

Beth