Where to start? Seeking been there, done that advice

[Tom Jones]

Hello, 

I am totally new to purchasing real estate. I would like to purchase an asset by August of 2018, but I have no idea what to purchase, and how to go about planning for the purchase.

I've read two bigger pocket books, and some Rich Dad, Poor Dad books, but after reading the Bigger Pocket books, I became overwhelmed, and I'm not sure I'll have the time and energy to do all of this, because I have a full time job.

My plan originally was to work for 2 years, save up 60k by August of 2018, and then after I got 2 years of employment under my belt I'd be eligible for an FHA loan, and then I could buy a 3 family tenement house in Worcester MA. Then I started wondering if Worcester was really the best place to invest because it's kind of a sketchy area. Then I started wondering if maybe there were better assets to purchase besides rentals. Maybe instead of renting to families, I could rent to businesses or something along those lines. Maybe renting a garage out to an autobody shop would be better? Or renting to elderly communities?

I think I'm kind of suffering from analysis paralysis. I'm not sure what the best thing to do is. My goal is to purchase an asset by August of 2018, and I'm on schedule to save 60k by then, but I'm just not sure what to purchase. Ideally, I'd like the something with the least hassle, and most financial benefit. I even started to wonder if maybe I should wait for the stock market to crash again, and then just put money into the stock market when there's "blood in the streets". But I don't know. If there's anyone else on the forum who has been in a similar situation, I'd love to hear some of your been there, done that wisdom. Thanks!

Also, I was wondering if Massachusetts is really the best place to invest in. I know renting laws in MA are not friendly to landlords, and they always favor the renter. But then I don't know if I'd be getting in over my head if I rented out of state.

I also don't know if 60k is enough capital to begin investing. Maybe I should save up more?

[Tom Jones]

Hi Charlie, 

Yes, that was another possible avenue I was considering. I went to school at UMass Amherst, so I was thinking that perhaps purchasing a rental property for students might be a good way to go. I remember I rented in college and I went through this organization called Kamins, I believe. I never saw the owner of the property once. Kamins handled all the business side of things. It was in 2005 and each of my roomates (3 of them) were paying something like 350 a month. That's only 12,600 a year. Not a lot of passive income on that, when you consider what the mortgage would be.

Ideally, what I'd like is to be able to get something like 200 dollars passive income per week, so that I could quit my day job, and start my own woodworking company. I don't think I'd be able to make it without some passive income coming in. I would make money from the woodworking company eventually, but I'd need some passive income to sustain myself while I waited to make a profit from the company.

200 dollars per week is 9600 per year. I wonder how many single family homes or 3 deckers I'd need to achieve that level of passive income. Probably quite a few. 

If the house I was renting was 150k, and I had a 30 year mortgage on it, then I'd be looking at 705 per month. I'd need to put aside some amount for expenses, and insurance, and repairs, so say 200 per month, so I'd be receiving 1050 per month, so I'd be making 100 dollars passive income per month. Haha. I guess that isn't going to cut it. :-)

Well, I'd need 8 SFHs to pull in 200 per month. So that's why triple deckers seemed more attractive. More cash flow. If I could purchase a triple decker where frat row used to be, then I might be able to net some cash flow.

Craig, yes, I'd probably just buy and hold. I don't think I'd be interested in flipping.