Complete newbie to real estate

[Diandra Duncan]

Hi. I’ve been interested in real estate investment for quite some time now but haven’t made any real steps to getting started until now. I’ve read a couple blogs, books, and listened to tons of podcasts but still have some trouble grasping a lot of of the concepts but I’m a very practical learner and hands on experiences work better for me. However, that interferes with my ability to ask the right questions. Background, I started my career in healthcare almost 3 years ago and don’t plan on being in real estate full time. But I’ve been able to save up a little over 100k, 700+ credit and currently rent with my brother. But my plan is to first own a two family in queens, ny, house hack with my mom and eventually have multi unit properties in Texas, Florida, and Jersey. People keep telling me I’m not ready, or that I shouldn’t go for it because I don’t know what I want. The thing is I know what I want, I just don’t know how to get there. I know that NY is a very sharky market and don’t plan to own more than one property there but I figured I’d start there since an fha on a 7-800k home makes more sense than an fha anywhere else. Does anyone have any advice for me as a newbie? Does my plan sound plausible? Any recommendations on where I can start? Should I use conventional or fha? Any advice would be great!

[Son D.]

House hacking a duplex as a start sounds like a great plan. That's what I would have done if I had thought about REI earlier in life. Having a tenant reducing your monthly payments will allow you to save even faster. You'll learn to manage tenant quickly. Telling applicants the landlord will live under the same roof tend to weed out most bad tenants. Personal home ownership will help you understand investment property maintenance. There are many advantages to your plan.

I don't know why people tell you you're not ready to buy a home. You've finished school, got a career, saved up enough money. Saving 100k after 3 years of starting a career doesn't sound like financially irresponsible person to me. So what doesn't qualify you as ready? For a buy and hold strategy like yours, time in the market is better than timing the market. The earlier you start, the quicker you'll get to your goal. Just make sure you know your market well enough. Conventional usually require 20% down. FHA would get you in much faster with leftover cash to start saving for the next one. Remember to account for mortgage insurance in your calculations.

After the NY duplex I would go to Jersey. It's far enough for you to practice long distance investing but close enough for you to travel quickly should you need to. After that it doesn't matter if you go to TX or FL first.