Selling primary home..want to start investing in rentals

[Allison Schleichert]

Currently live downtown Columbus and have about $150k in equity in our house. We would like to move out to the country to get some land and a cheaper mortgage payment so we can invest in rentals. What advice do you have for doing this? Should we pay cash for a fixer upper in a smaller city- can buy a single family for around $90k, live in it while we fix it up and BRRRR, then buy our primary property? Or buy primary property first then find a BRRRR? Or, should we buy a multi-family or single family still in Columbus with the same idea?

We own zero rentals at this point. Brand newbie here. Have fixer upper experience with previous primary residences though. I will also be taking my real estate exam within the next week, so hopefully that will help as we start this journey. Thank you in advance! 

[Nina Erlandson]

it depends on your time frame and what your lender can finance according to your income and how aggressively you want to go down the investing road. But sell the house first and get the 150k in the bank. Then a few options: 

1. Buy 5 rental properties with a 20% downpayment loan for houses that cost about 100k to 120k. that would cost you about 125k and leaving 25k for reserve. Each of the 5 houses should bring you about $250 a month, so you should have about $1,250 coming in as passive income. You rent the house that you live in. 

2. Buy a small multifamily in your area - ideally a 4plex in a not so wonderful shape, where you live in one of the apartments and you rent the others and rehab once the tenant leaves. Not sure what prices in your area are, but you can get an FHA loan for that one with just 3.5% down payment.

3. a mix between 1 and 2.