First post, first deal

[Brian Petty]

I've always planned on getting into real estate investing at some point in one way or another, and discovering this site a few weeks back has definitely pushed me faster down that road. So much to research and learn here.

With that, I recently relocated with my job and bought my first home, a little 2/2.5 townhouse that I got a 15 year mortgage on at 3.25% (!!). My goal is to have it paid off by the time I'm 30, which is a little over 5 years away. I'm currently saving about $500/month after expenses, so I've decided to start researching for my first investment property.

I've come across a couple properties I can afford, and was wanting to get your guys take on each situation.

The first is a great looking home, 4/2.5 with new carpet and new paint, built in 2007, that sold for $150k brand new. It was listed in November 2011 for $106k, and the seller has dropped the price 6 times since then down to $75k. I'm going to schedule to go look at it sometime next week, but from further research, I'm thinking it is a HUD owned property. The house right next door was listed at $160k within the last month, and is almost identical from the outside as the one I'm looking at (though I'm sure that price will drop as well, as the $75k one has been listed almost 8 months now). However, a smaller house around the corner is listed at $59k and the notes say it is HUD owned.

From the little Googling I've done on HUD investing, it appears it just means the owner foreclosed on a standard FHA loan, and when buying, it looks like there is priority given to occupants over investors, and a bidding process as well. I haven't seen much on here regarding HUD properties, are there any immediate red flags that sends to the experienced investors here?

The second property is a duplex built in 1951 that appears to have been somewhat updated recently. Each unit is a 1 bed/1bath, and is within a couple miles of a university. It is listed for $50k, and has been on the market for almost 3 months. I figure the monthly note would be around $200-250, and each unit would rent for around $350, leaving me around $500/month cash flow less what I would stash away for maintenance and other unexpected fees that might arise.

The first property would have a note of around $300-350, and I figure would probably rent for $800 worst case, leaving me about the same cash flow, but without the safety of it still paying for itself at only 50% occupancy like the duplex would. However, I think a home would attract higher quality tenants than 1 bedroom duplex units would, and I want to make sure there aren't any hidden pitfalls associated with buying a HUD home as an investment property.

A little about my situation, I work full time, and am required to be on call 24/7 for my job, so the last thing I want to deal with at home are calls from tenants. I'm even thinking it may be worth the peace of mind to find a good property manager to handle that side of it, even though it cuts into my cash flow a little bit.

Just wanted to introduce myself and get a little feedback from you guys. Looking forward to that first deal.