Asset allocation for a new investor

[Amy Jo Holweger]

I’m new to real estate and I’ve been reading a lot on real estate and finance, and I’ve started listening to the bigger pockets money podcast. However, I’m having trouble finding how to allocate my money to build a financial base while making a move towards buying my first investment property.

I'm newly debt free with 10k in savings and able to save 50% of my income. I own a condo which I live in. Im wondering how much to invest in my Roth IRA and SIMPLE, HSA, vanguard index funds, and how much to leave in cash and set aside for buying a rental property.

I’m also considering renting my condo and buying a single family home, or looking into house hacking if I can find a good deal, but I’m not sure if I should sell/rent, save for a down payment on a single family or save for buying an investment property.

How did you other folks get started? 

[Joe Splitrock]

Welcome to BP! You will get a huge variety of answers to this question. Keep in mind that BP is a real estate forum, so most people will tell you to go all in with real estate. If you went to Boggleheads or some other stock market forum, they would tell you to go all in the stock market. 

Personally, I like to max out my Roth IRA for the tax advantages and protection that retirement accounts have. I put the money in the Roth into index funds that track the wide market. It is really a set it and forget it strategy. Other cash I would use for real estate. I don't like condos due to the HOA, so I would personally sell the condo and look to purchase a duplex. Live in one side and rent the other.

That is my recommended starting plan, then go from there.