Buy Investment Properties or Buy My Family Home?

[Timothy A.]

Hi BP!

I have a decision to make and could use some advice from the community. I am getting married this year and my fiance wants us to buy a nice home to start our family in here in socal. But I also want to start my buy and hold business ASAP. Here's what I believe my options are:

1. If we buy our dream home, it will be owner occupied at probably 5% down, then I'd look to buy 3 more small investment properties over the next year using 20-25% down on each. This way wife will be happy and we will have gotten our dream home while the market is still low, but then I can't pick up investment properties using owner occupied rates and low down payments.

2. If we don't buy our dream home, I can buy a cheap starter home @ 5% down owner occupied, and then upgrade/buy an additional property @ 5% down every 6 months (and move-in of course), and so on until I get to 4 properties. This way I can pick up properties with low down payments, but we will need to move frequently which upsets the wife. And when it comes time to buy our dream home, it'll be at a higher market price than today.

Any advice on how I should proceed? I feel like option 1 would be great for the family, but limit my investment possibilities. Any feedback would be greatly appreciated. Thanks!

[Roy N.]

Why not purchase a nice small multi-family property (duplex, triplex, or quadraplex), live in one unit and have folks in others pay your mortgage. Then in two or three, move your family into a property with fewer units.