Looking for Advice on First Deal

[Brandon Wolff]

Background: I recently graduated from college (within the last year) and have been working and stockpiling cash. I currently have approximately $25,000 cash (held in a money market account). I am facing a few different scenarios and I am struggling to find which is best to delve into my real estate career. I am 24 and live in the Chicagoland area and desire to live downtown this summer. Any advice and opinions are greatly appreciated.

Scenario 1: My friends are asking me to move into an apartment. I know that paying rent is semi-foolish but I know that it would be an incredible time and memories that I’d have forever. I would then build my portfolio while living there and eat the ~$10-12,000 in rent per year.

Scenario 2: House-Hack and try to find a place on the North Side that is within budget. Only downside is that this is extremely difficult in Chicago given the current market and high prices. Realistically, to cash flow I may need to live in a surrounding suburb of Chicago or get lucky with finding an amazing deal. Or, just buy a beater and fix her up - however there really are no beaters in the Northern neighborhoods (e.g. Lincoln Park, Old Town)

Scenario 3: I would buy a 1 bed 1 bath apartment/condo so that I would at least build equity while still living downtown in the neighborhood by my friends. I would then be able to build my real estate portfolio from my own home.

Your advice is greatly appreciated in advance.

[Karl McGarvey]

Scenario 4: FHA Loan into a multi-bedroom house. House Hack and rent rooms to your friends so that you can have those same fun "young and dumb" memories. While all of this is happening they are paying you rent and paying your mortgage for you and you are living for free while building equity in the home.