Are these sound strategies for a buy & hold investor?

[Craig Moore]

Hi BP,

I've come to you with a few questions about some scenarios I had in my mind. @Joel Florek helped me hone in on what exactly I need to do (thanks, Joel!). I come here in hopes of getting more opinions on if I have my head on right or not and what tweaks need to be made.

I will start by saying that I would like to be self-employed by 30 and when my first child does come in my 30s I will want (unceasingly) the desire to be a stay at home parent. I would like my portfolio to be majority buy and holds as I will need the cash flow to reach my goals. Here are some scenarios, let me know what you guys think.

Scenario 1: This is the scenario I have lulled on the longest. I do not have much capital ($15K>), but I do have a starting base that is encouraging. I am in a unique position where I have the ability to wholesale at very little cost ($200>;1k mailings). I had the idea of wholesaling up enough capital to have 5% down for a pretty decent house (3-family) in a nice neighborhood. I know of FHA but am not sure of the house quality. After speaking with Joel he thought it'd be pointless to waste time trying to wholesale when I could be using that time to build equity somewhere else (wise advice). My idea was to buy a turnkey property, one that didn't need much work at all. If any, minor or cosmetic at the most. Is this unrealistic? Should I be going the BRRRR route? What do you guys think?

Scenario 2: This is an idea that I initially had coming in. Buying a duplex and renting out the other apt, living for free and refi the next year. However, I shot that idea down because I figured (and was advised) a 3-plex would be better for my buck. But in relation to scenario 1, should I just go for a duplex, put in the time, build equity, refi next year and then get a 3-family? Thoughts on this?

Also, please let me know if I am misinterpreting something, but are refis' not as "attractive" with houses that are already in good condition? What is the difference between buying a home already in great shape vs not so great shape outside of the possibility to raise it's value? I believe I am missing a piece to this puzzle. Nonetheless, I'm confident you all can help. 

So to sum this up, I am now considering these 3 options, but #2 seems the best right now:

1) Wholesaling for about a year to build significant capital then buy a 3-family. (Reminder: my marketing costs are virtually non-existent and I could possibly mail 2x a month)

2) Buy a duplex relatively soon, rent it out, build equity, refi and then buy a 3-family. (Awesome advice, Joe!)

3) Buy a duplex and still wholesale on the side (this opportunity is almost too good to pass up). Could I then combine refi money and wholesaling capital to then buy an even better property? Thoughts?

Thanks!

[Al R.]

All of your ideas are good, but what you need is an action plan with a true commitment and desire to do it. I personally like all of your ideas but I would go with what seems to be more feasible for you at this point and time. No one knows your personal life and situation more than yourself. You choose and make it Happen! As long as you have an action plan it will work. (Of course you need to know what you are doing to NOT lose money and time.) So be careful in your process and make sure you have a solid structure in place.   Best of luck to you.