Experienced builder, now it's time to invest in my future

[Don Healy]

In doing research to plan my path in to real estate investing I read 2 of @Brandon Turner's books, which lead to listening to BP pod casts, and further finds me hear on the forum. I can't thank this community enough to the commitment to openly sharing knowledge to better the people who come seeking.

As far as my background, I got my degree from WSU (Go Cougs!) in Mechanical Engineering, but decided office cubicles weren't my thing, so I took a job as a project manager for a home builder.  This got me ton's of experience with contractor management, people relationships, scheduling, etc. This also afforded my first, somewhat unsuccessful, venture into property rental.  

With the housing downturn in 2008, I got out of the home building industry and pursued jobs in nuclear and chemical project management and engineering management.  Now, 8 years later, I had the revelations that I still didn't like particularly like engineering, so I turned back to home building.

This leads to my current situation.  I'm working for a large regional home builder as a senior manager overseeing a group of construction managers for a region.

One of the benefits of my job is that I can receive an up to 20% discount on a new home if I select standing inventory, or a 10% discount on a home I have built on land that I purchase.  I can redeem this discount every 18 months.

To add to the story, my company will be moving me to a new region in June.  We are planning to sell our current home, which we have about $150k of equity in.  My goal is to make the smartest use of the equity to start investing in our future with buy and hold real estate.

Here are the current options for next steps that I am considering:

- Option 1 - Build a duplex, live in half- For this option, I would utilize my company, and my 10% discount, for building one of their existing 1400sf per side duplex floor plans on a piece of property that I buy.  Our preferred lender is currently offering 5% down construction loans which bundle the land purchase and construction costs.  Only interest is paid during construction.  As construction completes, they appraise and get you in to a 30 year fixed.  I anticipate cost for land and construction to be about $300k.  

- Option 2 - Buy an investment property AND a primary home - With this option, I would by a standing spec SFR utilizing my 20% discount, and buy an existing home to live in. I'll have enough capital from the sale of our current home to put 20% down on 2 mortgages. The investment property would be around $200k after my 20% discount. Rent should be about $1700/ mo in our area. Also, the existing home purchase would be made with the intent of turning it in to a rental after 2 years or so.

- Option 3 - Partnership - I have several long time friends who are at the same stage of life and wanting to put their money toward real estate investments.  We have been discussing pooling our resources to buy an existing multi family building together.  In this scenario, I would use some of my capital for this venture, then utilize the rest toward a down on having a new house built to live in at the 10% discount.

So, I will be diligently searching the BP forums and listening to podcasts to gather tidbits of information to help guide my decisions.  Any of your thoughts and advice on the options I am pondering would be appreciated.