Advice for a newbie, please......

[William J. Morgan]

Hello all, I have a question that has been on my mind lately. I am currently looking to purchase my first investment property, I have been looking at duplex/ townhouses as my strategy so I can live in one side and rent out the other. I am a combat veteran of OEF/OIF who served 6 years in the US Navy. I want to use my VA loan and was told that I have to at least live in one side of the property for at least a year? I have recently come across two apartment complexes that are for sale as well. I believe one is an small older 8-12 plex and the other is an older 8 plex as well. They both are in great growing sections of my city that are really desirable. The prices

Of each are over $400,000. I am assuming that with that cost and since I have never bought a property before and I only have a little over $10,000 to put down that I could not qualify for an investment property of this magnitude!? What type of financing could I use or employ? Or should I stick to a smaller 2 unit duplex/ townhouse to get started ?

[Joe Scaparra]

Hi William, I too am a vet but unlike you I'm probably a little older at 64 than you.  I say that to remind you that you have a lot of time left, so you should use it wisely.  A little baby doesn't pop out and say forget about crawling or walking, I'm ready to run a marathon.  

You have sooooooo much to learn about investment real estate.  My advice is to just put your toe or foot in the water.  Make sure it is right for you.  You have to get used to the temp of the water, ease in slowly as if your getting in a hot tub!

Specifically, I would look for a duplex. Live on one side, rent the other side. Using the VA loan for the first one will be easy. The benefit of the VA loan is no money down, not even closing cost out of pocket. So keep your 10k handy and get your first property. Don't over look on how to be a good landlord. Finding the property is half the battle, maintaining and managing is the other half and ie equally important.

You second property will require a down payment. So be frugal and save.  Get rid of any credit card debt and car debt!!!!!!  After 2 or  3 years you might be ready for another duplex.  If you move out of your first but, don't sell it, and move into the second one you can get by with about 5% downpayment on that one.   Now your on to building wealth.  Stay away from condos and subdivisions that have HOAs as those just siphon off cash flow.  Good luck and cheers, but learn to crawl before you walk, and walk before you run!!!!