Real estate investing suggestions

[Alexus Wenstad]

Hi all! I am a total newbie to real estate and trying to figure out my best route to take.

I would like to have rental properties at some point for passive income but right off the bat I am hoping to find a way to get a little but better ROI quicker- if possible of course.

I have some money I could invest in a fix a flip property perhaps, however in my local market my money won't get me far. Out of state I know is possible but I would think more of a challenge. And being done out of state I would expect I would need a partner who is capable of doing the fixing portion, since I wouldn't be there in person and also not super handy. However I'm not sure that with my funds, I will really find much- I have 10k at least- I don't want to use all my savings for this, some is an emergency fund.

Anyone have any suggestions for me? Would like to maybe do a few fix and flips, reinvesting the money into other fix and flips to eventually have a bit more to get a rental property and still have my emergency fund. Hope this all makes sense!

[Landon Bleau]

Alexus, great question!

I was in a very similar situation recently and found that house hacking was the best strategy for me. It allows you to get into a property for little money down as long as you live there for at least 1 year, as low as 3.5% if using FHA and as low as 5% if using conventional. I see you don't want to use all $10K to invest, so for an example let's say you use $7K and have $3k as an emergency fund. This give you $200,000 buying power if using FHA and $140,000 buying power if using conventional. I would suggest looking for a duplex or a house with as many bedrooms as possible in that price range, then either renting out the other side, or renting out the bedrooms. This strategy helps you cut down on housing expense as the goal is to have others pay for your mortgage, allowing you to free up cashflow from a W2 and save more money!

If this strategy interests you, there's tons of good information on how to do it, I would suggest listing to BiggerPockets podcast 252 and 350, as well as buying Craig Curelop's book on house hacking.