My First Post and First Question - Buying My First Home/Investment Property

[Griffen Herne]

Hello and welcome to my first post!

I'd like to first extend my gratitude to all those involved with BiggerPockets. The friendly, reinforcing community you have grown is a watering hole of knowledge and a web of networks; a true gem. I always wonder if another industry is as lucky to have a resource of this caliber at their fingertips and earlobes - shoutout to that podcast of yours! I listen everyday and every show has GREAT insight into the world of real estate investing. The array and depth of concepts that are revealed through your conversations with esteemed guest speakers is in one word: Awesome. Thanks again for all you have done to make this resource possible and thank you to all the engaged members on this site who make BiggerPockets what it is.

Anyways, onto myself - I am a young, motivated, and diligent individual currently en route to becoming a licensed architect as well as an aspiring real estate investor/broker. I am soon approaching the point where I pull the trigger on my first investment purchase (next few months) and am looking for some feedback on the options I am weighing to begin my journey. 

The current benchmarks my partner and I have established for the 2015 year include:

• Fix and Flip 2-to-3 single-family residences 
• Establish business entity 

A snapshot of my current financial situation looks something like this:

• Income: $38,000 (PM at Architectural Consulting Firm)
• Assets: $13,000 (8k of which are devoted to investments)
• Debts: $17,500 (School Loan)

With that being said, I am also debating purchasing my first primary residence and am trying to figure that into the plans. The way I see it I have two options:

• Option 1: Buy and Hold My Parent's Up-to-Date Condo (5 Year Residence)

1. My parents own few residential properties consisting of condos, apartments and town homes and are looking to sell. One  2 bed/2 bath condo in particular they own outright and we have discussed them leaving money in the deal, something like a 60/40 scenario, where I can take a traditional loan out for the remaining purchase price. 
2. Upsides: I like this because it allows me to put 0 money down, waives me of mortgage insurance payments, and I build equity with a reduced cost of living as I will have room for 2-3 known roommates. I could thus use my current assets for financing a fix and flip investment. In addition the condo is part of a 1970's development with a B to B+ location and quick access to the heart of the highway system in Illinois putting me 10 minutes away from work. 
3. Downside:  I will not save as much money as I am currently able (iving with the folks), which I could  put towards a downpayment or repairs of a single-family residence. Furthermore, my parents have not left much room for improvement on the condo. They have kept it up to date over the years and will probably be valued between 100k and 110k. Other units in that complex which were not up to date recently sold for roughly 90k and further distressed condos have sold for less. 
4. Exit Strategies: Live and rent out condo. When viable (5 years), sell the house and split the profits with my parents or eventually buy out my parents and rent the property into passive income.

• Option 2: Buy and Hold A Distressed Single-Family Residence or Duplex (2-5 Year Residence)

1. Upsides: Much more potential to add value and make larger capital gains for the investment business. The residence will likely have lower mortgage payments and cheaper property taxes, 
2. Downsides: Financing and finding the right deal will possibly eliminate my current assets and I will be unable to have skin in the game for a different investment. The trade-off to lower mortgage payment will be mortgage insurance and 20% downpayment through conventional loan.
3. Exit Strategies: Live and rent out single-family or duplex while making repairs over the years and either keep in in the portfolio as a rental property or sell.

While I'm not looking to jump the gun on any decision at this point in time, I would like to know how strong of an idea the first option is compared to the second and if I have correctly examined the strengths and weakness of each investment opportunity.

Thanks again BP Nation!

BP, You're All I Need