Currently In A Rent-To-Own Agreement: Ideas/suggestions?

[Roger Smart]

Hello Everyone,

Last May my good friend and I attended a real estate investing seminar. We ended up spending the money to attend a subsequent 3 day workshop where we learned that we would need more education. We could not afford the pricey mentorship program they offered, but instead we signed up for a "business start up kit" and some fancy software called Propstream.

Realizing how big of an opportunity there was to make money in real estate, I decided it was best if I took my current monthly rent payment and applied that to owning a house instead. I immediately went looking. As a bartender it was very hard to get a loan because I needed a 2 year history of tips to count them as income. I found a coworker selling his house and couldn't get a traditional loan. I had read an article or two about seller financing, rent-to-own and lease option purchasing agreements for the home and I was able to convince him to sell it to me using rent-to-own.

I put no money down. I pay $875 a month with $100 going to an Escrow account that I will get back at the end of the agreement. It is an 18 month agreement that expires with a balloon payment of $51,000 in December of 2015. 

As I am researching more and more about real estate investing it seems that this is not the way I should be going. I now have a salary job making $41,000/year and decent credit score and could probably secure an FHA loan on the property for my payment in December.

I have two roommates and my plan was to get a 3rd after I owned it, so they could pay down the mortgage for me and I could move into another place to repeat the process. It seems that a duplex is best for this practice however. 

Does anyone have suggestions, comments, questions, concerns with my plan. After joining this site, reading some articles and the UBG and listening to a bunch of the podcasts, I feel confident that I will get a good quality response. 

Thanks for taking your time,

Rod