New and looking to start real estate investing in Lynhburg, VA

[Bradley Moore]

Hello,

I'm very new to real estate investing and have only began looking into it recently. The biggest problem that I am facing is a lack of startup money (we do have savings, but not enough to use much of it comfortably for an investment). My wife and I currently have a mortgage on a house we're living in and we are renting out our basement, which is going really well, but we're using basically all the extra we can for that to go toward principle on our mortgage, so we have none of that to use for a second mortgage. I'm looking to try to make some extra money in order to get some to use, but it will probably take a couple years to get to that point.

Really the main reason for my interest is to be able to have one house per child eventually (3 or 4, we currently have one child that's 8 months old but planning on more). So what I want to do is go ahead and start investing in property as soon as I possibly can, and right now my best options are either purchasing a house or a townhouse to rent out to get started.

From my research, I'm leaning more toward a townhouse as a first purchase because of purchase costs and benefits of maintenance being included in the HOA (or whatever they're called for townhouses), but I'm still open to purchasing a house if what I have researched is not accurate. My area is a growing college area (Lynchburg, VA) with many good college students, of course there are the bad renters out there, but hopefully attempting to weed them out will cut down on those issues some. So, even though it's still a major aspect I'm keeping in mind, keeping my properties occupied is not the highest concern on my list at the moment.

Once I actually jump in and purchase my first property, my plan is to do a 50/50 split with all net income, 50% toward principle on the mortgage payment and 50% toward a savings account set up for any maintenance needs until that account is built up to a comfortable number, then 100% toward principle thereafter.

My father is also a general contractor, he finished off my basement in order for me to rent it out, so I also have him as a resource to turn to for maintenance and issues. I'll have him help with initial inspection of properties as well before purchasing to make sure there's no hidden issues or anything that will require fixing before renting it out.

So does anyone have any advice on how I should begin or how I should revise my plans at all? As I said at the beginning, startup money is my biggest hurdle since most loans require between 5% and 25% down, and I know that it's best to put some down for rates anyway, but I don't have that. So any advice on what to do there?

Thanks!