Rental Property Investment First purchase

[Randolph Bartholomew]

Hello Bigger Pockets Family!

Had a fairly straightforward and two quick questions. I am a 26 year old about to purchase my first personal home and would like advice from the many.  I am committed to the rental property niche and would like to know if it is a smart idea to purchase a single family home or multi-family as my first purchase. Stay in that home for a year and using that home as my first rental property, while moving onto another one.

Second Question

I have been told many different ways to get a second rental property while living in my single family home. Hard cash, bank loan, equity loan etc.  Wanted to know what you the many recommend as far as funded the second future rental property. Any advice and experience will be greatly appreciated.

[Corby Goade]

Personally, I think house hacking- living in a property for a while, then moving out and renting it, is the best way to get started. If you can do that in a multi, even better. I wish I would have started that way. As for getting your second property, there are many creative ways to do it. I'd avoid hard money whenever possible- it's very expensive, but can be a useful tool in certain situations. My suggestion would be to buy a first property that is livable, but needs plenty of love. Fix it up while you are living there and force some equity. Once you've made necessary upgrades and repairs, get a HELOC and use is as a down payment on your second property. Buy a second property just like the first one, make your repairs then refinance the whole thing and pay off the original HELOC and repeat the process until you are financially free. You can do it. Good luck!