Best Steps Moving Forward? House Hack Advice for a New Investor.

[Account Closed]

Hello BiggerPockets Community,

My name is Phil and I'm an aspiring real estate investor currently living in greater Minnesota. I've been thinking about, researching, and trying to plan for my RE investing future, but I'm feeling stuck at the moment (more on that below). I am hoping your advice/insights/new perspectives will inspire me to take action. I know this journey is personal and that I'll need to make my own decisions and take my own risks, but I'd love to hear your suggestions on the best plan of action moving forward. 

A bit more about my current financial situation:

Current Income-

• $6,800 monthly gross wages (my wife and I both work full-time in higher education)

Current Debt-

• $99,945 mortgage balance on single family home 
  • Monthly payment of $858 (includes P&I, insurance, taxes, and PMI)

Misc. Financials-

• Credit Score: 750-800
• Non-retirement Savings: $30,000

Real Estate Holdings-

• Aforementioned SFH purchased for $117,000 (4.25% interest rate).
  • Recently sold comps ~$135,00-$150,000 (we put sweat equity into the house- new paint, DIY hardwood refinishing, replaced carpet)
  • House is 3 bedroom, 1.5 bath rambler with double attached garage, patio, and attached 3 season room. Basement is unfinished.
  • Rent is low in our area, so keeping the house as a rental doesn't seem viable. We will plan to sell. 

Experience:

• My father is a remodeling contractor, home inspector, property manager, and county rental inspector. I've worked with him on many projects (including a foreclosure rehab) and am very familiar with property management. 

Short-term Goals-

• Purchase and owner-occupy a multifamily unit (ideally a 4-plex). I will self-manage the other units.
• Transition to living off one-income and start having children (my wife enjoys being busy and the social aspects of work and wants to continue full-time employment).

Long-term Goals-

• Grow real-estate portfolio to consist of a handful of multi-family units.
• Live off of real estate investment cash flow (i.e. achieve financial independence).  

Why Feeling Stuck?

We currently live in rural MN, but want to relocate to a larger city in Minnesota (ideally somewhere in the Twin Cities Metro, but maybe other population centers like Mankato, Duluth, etc.). As such, we've been holding off from selling our house, searching for multifamily units, investigating loan options, etc. until my wife finds a new job and we know where we will be living. In my head, the steps moving forward look something like this:

Find job ---> Move into temporary rental ---> Sell house---> Be pre-qualified for FHA loan--> Find multi-family unit.

Here are a couple of questions: 

• What should I be doing now in preparation if I don't know the exact location where we will end up? I've been doing a lot of research (books, blog posts, podcasts, etc.), but I'm anxious to take action. 
• Is it a mistake to wait to apply for a loan until after we make job changes? I assume my wife will have a monthly gross income around $4,000, but it will be a brand new job for her and I won't have any income to show on a loan application. 
• Am I missing anything?

Thanks in advance for your thoughts and suggestions. 

[Jake Hartnett]

Save Money - 'Nuff Said

Network - Books and podcasts are great but they only go so far. Network with other investors, agents, lenders, contractors, management companies etc. in markets you are thinking about moving to. There is only so much you can do without getting in front of people. Get on Portal emails from agents to get a feel for deals in different markets.

Define Goals and Criteria - Probably the most important. If you don't know where you are trying to go every road will lead you there. ROI, cash flow per door, rehab you are willing to undertake etc. Know exactly what you are looking for so you will know when to pull the trigger.

Set a deadline and work backwards - I find this very helpful. Ask "what do I need to do by ___ Date to accomplish my previous goal."

1/1/18 close on a 4-plex

"What do I need to do by 10/1/17 to close on a 4-plex by 1/1/18?"

10/1/17 move to target market

"What do I need to do by 9/1/17 ...."

etc

and work backwards to what do I need to do this month, this week, today, right now. Do this once a week at a dedicated planning time and plan your week around your weekly goal while keeping an eye on your other goals. I like Sunday nights for this.

You are way more likely to accomplish your goals (even little ones) if you write them down, and even more likely if you tell someone else who will hold you accountable.

Good luck!