First-Time Investor in Rental Real Estate with $20K

[Aaron Burkhart]

Hey guys! It's great to be here and connect with you all! My name is Aaron Burkhart and my wife and I are seriously considering investing in our first rental property in Louisville and would love some advice from those of you who have been in the game longer than us!

Some background: I work and attend school at The Southern Baptist Theological Seminary in the St. Matthews area, make around $39K after taxes (wife is full-time student and not currently working), have zero debt, and have around $20K to invest with an additional $10K or so I could put into repairs if needed. My wife and I are also in a pretty awesome situation right now living in an apartment her parents own and only paying $300 per month!

Our goal: At this point, I'm happy to stay in my job, but would love to gain some passive income on the side and continue to invest and reinvest the profits into additional properties as we're able. Though I enjoy my work right now, I would be thrilled to get to a point with rental property income where I could either quit my job and work on it full-time, or move down to part-time work to free up more time to spend with my family, my church, and to travel more often.

If I'm being honest, I'm really starting from scratch and am not exactly sure where to start my search! We are open to multi-family homes, SFRs, and other sustainable rental investments around Louisville providing they are in a relatively safe location. I would greatly appreciate any advice you all may have on our situation and the following questions:

1. What area of Louisville should we be looking in? 
2. Are my $20K savings and $10K for repairs numbers realistic to get started?
3. What kind of properties are doing better in Louisville right now? SFRs? Multi-family homes?
4. Any recommendations on lenders and financing?
5. Is it best to work with a realtor to find deals, or do it ourselves?

Sorry for all the questions! We are very eager to think through these possibilities, but we also want to have our eyes wide open to all the dynamics of investing in Louisville that we are unaware of. 

Thanks so much!

[Erik Hitzelberger]

@Aaron Burkhart - 

1) We have the benefit off living in one of the most affordable cities in the country when it comes to housing. That means you can buy good rental properties in most areas of the city. I prefer properties in solid neighborhoods where the residents will be able to live for a long time.

As such (and given your down payment amount), I would look in the south end, Okolona, Fern Creek, and possibly J-town

2) absolutely 

3) SFr

4) send me a PM and I’ll give you the names of a couple great local lenders who understand investments... either can find you an appropriate product

5) this largely depends on your goals. You mention that you want to be a passive investor. If that’s true, find a good team and use their expertise. If you want to ‘get a better deal’ by being an active investor, start networking with wholesalers and studying the market. I STRONGLY encourage you to put assign a realistic value to your time and account for that in your deal analysis. Being active is a job and must be treated as such. 

Good luck!