Overwhelmed with Options

[Adam Carskaddan]

Looking to invest in my first property and trying to do my due diligence but there's so many options and angles to look at. Owner occupied, investment rental, pre-foreclosure, FHA-203K, Geo factors, Section 8, and there's so many more options I haven't even had time to explore or that I even know about. How do I figure out which path to travel on my road to real estate investing? How do I find my niche? I currently reside in Hartford County, Connecticut but I am open to all opportunities so long as the numbers work. Any advise on how to navigate the various strategies and methods involved in the real estate investment market? What should I be focusing on?

[Scott Hollister]

Hello @Adam Carskaddan

Congrats on the first post and welcome to BP, your life will never be the same:)

This my best advice, and a common thread from experienced investors here on BP. 

The absolute best way to get into real estate investing is the House Hack (Live in one unit, rent out others) with a low down payment loan. Typically the FHA loan, 3.5% down. If you buy a 3 or 4 unit you will need to have a post closing liquidity of 6 months of mortgage payments, you will just need a little more in the bank as opposed to just buying a duplex.

You can also use the 203k Loan, same 3.5% down, but you will purchase a Property that needs a rehab, use a general contractor, close the loan, rehab the property, and move in once finished. I think if you do this right, it can be even better than the first option. But it IS a headache and there are a couple possibility that you can get buried on this option, like going way over the rehab amount. (Which will come out of your pocket, can be scary if you don't have the money in the bank). 

Focus on your market, pick one or two, not ten. Look at everything that has sold, look at stuff on the market, start making your own comparisons, basically you want to know almost instantly if its a good deal or not (Of course the inspection will give you a better understanding) But from the outside, for the offer, you need to act quick, especially in this market for small multifamily. 

Find an amazing agent that knows investment property, house hacking, and your market, if possible. And don't be afraid to ask questions, read @Craig Curelop new book on House Hacking if you get a chance:)

And try to keep on blinders when it comes to shiny object syndrome, the most important thing you can do right now is sit down with a lender, understand how much you need to close with, find your market, find your agent, and educate yourself. Then once you execute on all of those, you will find your first investment property! Best of luck!