Advice Needed: Rental Property Investment and Student Loans

[Stephen K.]

Hey All!  Extremely excited to be here and to begin my Real Estate Investment journey.  I have been thinking about this for the last 2 years and now that my wife and I are looking to buy our first home within the next year, I decided it was time to invest a lot of time into research, the local market, and the "how to" as Brandon puts it.  So without further adue, here is our situation:

My wife and I both have student loans combined pushing 130k. 4 months ago we had our first child, so right now with my wife working part time and my being full time, we bring in around 60k a year. At the pace we are at, it would take roughly 20 years to pay off our student loans, so I thought now was as good of time as any to begin what I've always been fascinated with: real estate investments, specifically with rentals. We are looking at purchasing a property that is 100k or less. The goal is to build an LLC with a good rental property portfolio and use the cash flow to pay off our student loans, and then once those are gone and any other outstanding debts are paid in full (car, etc) begin to focus completely on growing the business and building financial freedom. All in all we should have roughly 15k to put down for a down payment and closing cost for a house. We are currently tossing around 2 ideas:

1)  Get a duplex; rent one side and live on the other - We would use a management company to handle the other side so we could more or less remain anonymous owners so as to avoid any interference with our personal life while we are raising a baby.  In our area though, I have not been able to find any duplexes remotely close to what we'd want to spend on our first property (100k or less); they appear to be roughly 1.5 - 2x that amount.  My wife is not crazy about this idea either (the cheaper duplexs that fetch for roughly 170k are the typical ranches you picture when you see a duplex, and the areas are not so ideal for a family).

2)  Get a SFH and live in it for a few years then rent - There are plenty of houses in our area for less than 100k, so easily doable.  Sure, we will have a property to rent when we are ready to move out, but this would rely heavily upon our being able to get another loan for another house and then having to front the expenses until we would find renters.  

I was hoping to get some advice on our situation.  Any other options or advice here?  Anyone who has been in this same position who could share their experiences?  Thanks for any input you have!  

[Andrew Kerr]

@Stephen K. - Congrats on putting a plan together and starting to take action. Here are a couple of thoughts.

1) Keep in mind if you put properties in and LLC, you will end up with commercial financing which is has higher rates than conventional financing. My personal strategy is to max the conventional loans when possible, then use commercial financing for when I go above the 10 loans for conventional and for JV.

2) Go with the small multifamily and live in one unit. If you go the SFR route, you will have higher housing costs. But if you get a good deal on a multi, you can lower or eliminate your housing costs. This will give you more cash flow to put into your second property and/or pay down debt. I just finished my third househack/BRRR. It makes it so easy to get a deal done, and build cash.