Beginner Invester/ homebuyer needs advice!

[Mark Hoggard]

Hello,
I am a first time homebuyer/ investor and i am currently trying to decide my
best rout to take to start a good real estate investment career.
I was hoping i could find some advice on this forum. I currently stationed in the Virginia Beach
area of Virginia(my wife and i currently reside with her mother to save up money) but
I am in the military and have traveled around alot. I recently
stopped in Florida, where I realized how low the prices were in many areas
(Cape coral for instance, where I have found many almost new houses in good neiborhoods for around 50000 dollars.)
This sounds like a great buy and hold investment opportunity so
I have been talking with a friend of mine about investing in a house down here, and splitting the mortgage.(we have about 20k between us)
but i am worried that if we do, I will not be able to recieve good financing on a multi-unit in Virginia Beach.
Could anyone tell me if:
1. they think it is a good idea to invest with a partner in an area where i will not be staying
2. I will still be able to recieve another(larger) mortgage for a home to live in.(multi-unit)

i have a pretty good credit score(above 700) and have an income of about 2500 a month.
Any help and inputs would be much appreciated, Thank you very much.

[Sharad M.]

Hi Mark,

Does your friend you plan to invest with, does he live in the area where you plan to invest? If not, I personally wouldn't do it. It has been discussed a lot on this forum that you do not want to own an out of town investment property, specially as your first one.

But if your friend lives in the area and you trust him, then it's a different story. Then you will have someone who you trust and who has an equity interest in the property to look after it.

To answer your second question, I think you might want to read this blog from Jeff Brown. It has great information and applies to your situation.

http://www.biggerpockets.com/renewsblog/2011/02/01/tune-up-real-estate-portfolio/

Good luck.

[Mike Jakobczak]

Just a side note on Cape Coral that you should be careful about. There was a huge demand for properties and the growth from 2002-2006 lead to a lack of drywall. They brought in another supply, which is now know as "chinese drywall" It's toxic and actually eats away at copper. Some of the newer homes need to be redone. Which can turn a brand new 50,000 house into a major rehab. This shouldn't stop you from looking into that area just to give you a heads up.

Good Luck!

[Mark Hoggard]

Thank you both for the advice! i will keep an eye out for the chinese drywall. my friend does not live in the area, but we figure we could get a property manager down there and get enough to cover more than the mortgage. If we cant, it wouldnt be too much of a loss, 50k loan between the two of us. we could hold it a while.

[Brandon Kamm]

Interview several property managers and ask for references from them. Make sure your references have similar properties as you, sfh for example, maybe even in the same neighborhood. They should be able to give you realistic expectations on your investment

[Bill Gulley]

As to #1, no. it's not the way to start IMO.

#2, yes, so long as you qualify with the debt. The next lender,after one year, willallow 75% of the rental income to off set the debts owing OR they wll allow only that amount shown on Your tax returns as the amount of income. To get an idea of what you might be able to afford on your home in the future, ask your bank or loan broker to pre-qualify you based on another mortgage.

[Matt T.]

Personally, I'd hold out and find a multifamily property in the area where you live. You should be able to qualify using your VA loan with little out of pocket expense as long as you live in one of the units. Could be a great way to get started.

[Mark Hoggard]

Matt T, That is exactly what i ended up doing! i now have my first Triplex in my home town! thank you all for the help!