Have capitol, looking for tips to start in real estate

[Kyle Speelman]

Hello,

Well i am 26 years old, educated, job paying around 70k a year, currently rent, paid all schooling off, absolutely no debt, just started a Vanguard Roth IRA, and have quite a bit saved up in saving account just sitting there doing nothing. I travel mon thru fri all over the US for my job so it makes owning real estate that much more difficult to manage.

What would i like to do? In a nutshell: finance 5-20 houses/duplexes/tri/condos/apartments, have my renters pay off my mortgage, collect a small amount of income on top of that, wait 20 years(if i dont refinance) and sell building for pure profit after appreciation and inflation.

I'm sure many people have thought this thru, put blood sweat and tears into it and could not come out on top. To me it seems fairly simple despite the late calls, tons of $ spent into upgrades, and terrible tenants but in the long run it still seems worth it. If i feel like i cannot keep up with a few building and a full time job i will hire a company to do all the leg work for me. If hiring a company take all my monthly profits then so be it....ill still make out big in the long run with appreciation and inflation when i sell after mortgage is paid off.

I do not have any friends or family member in the real estate business, so i dont have anyone to go to for advice. Does my plan seem realistic or just a dream?? Should i pick a city and stick with it or buy around the US?

Any info from people who have been in my position or have useful advice is welcome.

Just a young guy looking for direction/advice from seasoned veterans who have "been there and done that" plus some.

[Aaron Montague]

@Kyle Speelman 

Welcome to BP!!

My recommendation is find yourself a 2-4 family house and live in it as an owner occupant. This will teach you just about everything you need to know about Buy and Hold real estate investing. You'll learn whether or not you want to field the late night calls because they will come in the form if a text message late at night :)

Q: I like the concept of MFH investing, where should I start?

Short Response:

1. Eliminate your rent payment
2. Bring all deals to the BP community (and be humble when doing so)
3. Stick to the returns you want

Long Response:
Learn everything you can about multi family investing. Every day you should answer a few questions and write down several new ones.

The general theory is that you need to drive costs out of your life and/or add new revenue. If you live with your parents, and they don't charge you rent, good. I'd then start forcing yourself to put $500-700 away each month as a "rental" payment towards some real estate.

If you pay rent of any kind, to your folks or to another landlord, find a way to eliminate it from your life. My suggestion is to find a 3 or 4 family property that you can purchase. FHA loans are a good way to go, but be wary of the additional percentage points you have to pay each month as PMI. Homepath loans are great as they have no PMI. VA loans are even better, but require you to have served in the US military.

Run every deal you find through the BP community. Some of the responses are harsh, but they are eye opening. There are people on this site that have been buying and selling 4x as long as I have. When I find answers to my daily questions, I can almost always find the answers here at BP.

Last one for the moment: stick to your numbers. It bears repeating: stick to your numbers. If you want $200/month and a 12% Cash on Cash return for your investment, stick to that number. If you pick 12%, 9% is not good enough, nor is 11.7%. Make your offers accordingly.

Here are several good ways to get into your first place with a minimum amount down:

0% Down:
NACA (https://www.naca.com)
VA Loan (http://benefits.va.gov/HOMELOANS/index.asp)
Rural Development Loans (Renovations MAY be included)
(http://www.rurdev.usda.gov/HSF-About_Guaranteed_Loans.html)

3.5% Down
FHA (http://portal.hud.gov/hudportal/HUD/topics/buying_a_home)

3.5% AND Renovations
FHA 203k loan (http://portal.hud.gov/hudportal/HUD/program_offices/housing/sfh/203k)

5% Down
Homepath Owner Occupied

Not as cheap, but come with renovation options attached to the loan:
10% Down
Homepath Investment (SFH only)

20% Down
Homepath Investment (Duplex only)

25% Down
Homepath Investment (3-4 Unit Buildings)

Auxiliary:

http://203kcontractors.com/