First Investment struggle

[Naeem Boucher]

Hello,

I've been searching the market for my first investment and unfortunately I'm struggling to pull the trigger.  I had my first deal under contract but it was a short sale and died two days before closing.  Long story short the seller was once married and the ex-husband didn't sign off on the needed documents.

Ideally, I would like to house hack and live for free while making at least $1,000.  Im starting to think maybe my goal is too big I'm not certain.  Well, in my market I can probably find it but the area would be  pretty bad.  With these areas run the risk of having problem tenants.  However, section 8 tenants would be guaranteed money.

Im stuck deciding between taking advantage and getting some cash flow coming in or setting myself up  first to live in a decent area while breaking even.  All while  saving up to fund the next deal.  So many options and I'm stuck deciding on which to follow.  I lost money on the first deal so currently I'm saving back up to get going again.  With low down payment and requesting a seller's concession I'll be able to speed up the process.  However, if I wanted 3-4 units then I would probably struggle since I wouldn't have the reserves.

Open to any advice out there.

[Austin Fruechting]

@Naeem Boucher - It's a very rough and general rule of thumb that you should not use. lol

In my opinion you should only apply an expense ration for a certain type of property after you've run enough full analysis to recognize the pattern that applies.  I have properties in that fall at 40%, and some that fall at 60%, but they can range outside of that too.  I never used standard ratios for my first many years.  

I always did full analysis and calculations on every one I ever looked at.  Then through experience I started recognizing the patterns for different property types, rent rates, areas, etc.  Now in my area you can tell me the details and I can be within a couple percent of average expenses.  Knowing exactly what to apply only comes through doing full analysis over and over.