Long Term Buy and Hold Strategies

[Justin Minikes]

Hello All,

I was wondering everyone’s thoughts on this buy and hold strategy.

Background: I have a single family deal lined up now to get my foot in the door of real estate investing. I am 26 years old. I work a full time job (in construction) and it pays well. I live below my means for the most part.

Purchasing a home with a conventional loan. Putting 10% down on a 30 year mortgage. Rates are really low right now. I got a 3.75% interest rate on my loan.

Moving in for 1 year and renovating the property while living there which is required per the loan agreement to be the primary residence if you use a conventional loan.

I wouldn’t consider the house distressed, but some improvements are definitely needed.

After the first year, rent out the house to a tenant. It should bring in about $250 in cash flow or 10% Cash on cash.( I get that this is not astronomical). I may have another $15K to invest in a new property after that first year of living there and now have an extra $250 coming in every month.

After finding a tenant, possibly doing a “stack” and buying a duplex or triplex or some more units. I would house hack this property.

Thanks for your feedback in advance!