Buying my first home

[Cody Sanchez]

Hello all,

My wife and I are wanting to get out of the renting trap and buy our first house, the thing is that we want our first home to also be our first investment property. We're both young and unfamiliar with how to approach this from a practical standpoint. I've looked at buying a foreclosure, but we don't have absurd amounts of money to renovate it. We've narrowed it down to two ideas (though I'm happy to hear other suggestions from experienced members). My ideas are as follows:

1. Buy a duplex. We would live in one half and rent out the other unit (though it can be awkward living next to your tenant from what I hear).

2. Buy a fixer upper that's still habitable (unlike a foreclosure). We would then renovate as time goes on while building a hefty savings account. We would then buy another house when it's time to move and instead of selling the first house we would rent it out and use our savings for a down payment on the next house instead of capital from selling the first house.


This is what I've come up with so far and I would love to hear from all of you what your thoughts are on this. Any advice is greatly appreciated!


V/r


-Cody

[Ryan Canfield]

@Cody Sanchez  Hi Cody, In a perfect world, @Austin Youmans suggestion of a 203K loan on up to a four flat would be ideal in my opinion.  It would give you valuable experience in managing tenants to let  you know if you really have it in you to be a landlord.  You would be near the property in the event that something came up that needed to be addressed.  It would make prospective tenant showings easier as if someone blows you off when finding a tenant, you didn't waste your time in driving over to the property to be stood up.  You would also get experience in seeing and being part of a rehab without actively managing the rehab process.

As far as house hacking goes and living next to your tenants, in my opinion, it's what you make of it.  It took me 6 months to convince my wife that we should live in a building with our tenants.  To an extant, depending on the type of property you and your wife are currently renting, it's no different.  There's other people living near you, the only difference is you have a different relationship.

My wife and I are currently house hacking our 2nd property.  So far for us it has been great.  We've really enjoyed it along with offsetting our monthly living expenses.  So far it has show the both of us that we have what it takes to be landlords and again, for us it has been a great experience.  Our next goal is to find another 3 flat that needs work and house hack that property while fixing up the units.

Please let everyone know which direction you end up going and good luck to you!