Beginner Investor Strategy

[Tyler Vinsand]

Hello BP community,

I am looking to purchase my first buy and hold investment property, but I've had trouble determining a strategy after doing some number crunching. I was hoping to receive some insights from the BP community to help me out. Here is my situation:

I have about $10-15k to invest and I plan on living in the house for at least a year (I will have owner-occupant status). My plan is to apply for an FHA loan in which I only need to provide a down payment of 3.5%; however, this is where my problem comes in. The most ideal rental properties in my area go for around $200-250k. Anything less than that is typically either in an area that attracts bad tenants or it is a house in a good area that needs a lot of repairs. This tells me that I can either: a) buy a $200k property but incur a negative monthly cash flow of roughly $100/month (because of the large monthly payments) or b) buy a cheaper property in a good area that requires a bit of repairs.

I know that, at first, option b sounds like the clear choice, but I am worried that I will not be able to afford to buy the house AND pay for the repairs. I am not a handyman whatsoever, so doing the repairs myself is out of the question. 

I am aware that there are options in which I can finance the repair costs in the loan or partner with somebody to make a 20% down payment, but I'd rather avoid these options because I do not want to be too deep in debt at the start of my professional career and I would have a hard time finding a partner that I could truly trust within a reasonable amount of time.

I'd love to hear any suggestions that you all may have and I look forward to hearing your responses! Thank you in advance for your thoughts and insights!

Sincerely,

Tyler