Starting out, in search of advice

[Kole Kingslien]

Hello there,

I am writing this post in search of some advise to help get me started in real estate investing. A little about myself and situation.

I am 22, and my wife is 20 years old, we have about $16,000 saved up, and would like to start investing in real estate, to build wealth for us now, and for our future. I have been doing a lot of reading and researching (on biggerpockets and else wear), but feel stuck/nervous about getting into my first investment. Due to our limited funds, we want to figure out how to get a great deal, with as little of our cash in the game as possible, to allow a "safety net" of sorts. I work in Madison WI, we are hoping to find something in/around that market, I don't know if it's just me, but I feel like I can't find very good deals. Our goal is to obviously have good positive cash flow, to allow us to re-invest in more property for a "snowball" effect.

We want to find an owner occupied opportunity. We have been to a lender, and shouldn't have a problem getting an FHA loan, up to 4 units. I just feel like I can't find any good deals in my area, the numbers just haven't been adding up very well. Not sure what to do, every property I seem to check, has a decent negative cash flow. Should I take negative cash flow, or hold out?

From my analysis, I would be receiving only about 100-300 cash flow with all units rented (-550 to -250 When living there). that doesn't account for vacancies, or capital expenditures. Is this a good deal? My goal is to then invest in another within about a year, with this small of a return, I would not have the cash to do that. You see my predicament? I want to get started, but I want it to speed up my investing ability, not slow it down. I'm not sure if I have unrealistic expectations or not.

Also, in regards to negotiating a deal, I want my first offer to be low enough to allow room to negotiate up to my desired price, but I don't want to be so low as to cause offense, how much give is there when negotiating? The price that would make the numbers work is about $280,000 (lower would be better obviously). Asking price is $325,000. The fair market value, and the price it was assessed at for taxes, is $236,000 (according to the city records). Would it be absurd to offer below the fair market value?

Thanks guys,

Kole