Hi All,
I have been digging into a lot of advice lately on financial independence and investing in real estate. I am really thirsty for knowledge but I am realizing that there are a few different schools of thought and many niches in real estate. I am having a hard time honing in on one approach -"the forest for the trees" - for many reasons.
While there is a ton of good information out there, this general advice, at times, is hard to tailor and apply to my own life with my own unique goals and living situation. And, I am having a hard time keeping up with all the reading/podcasting/audiobooking to get all of this good information and get started while ensuring I am crunching all the numbers and checking all the boxes. Yes, I understand that with investing comes risk. But, I want to be an informed investor and not wait forever to get started.
There is one important question that may sum up the root of my gas pedal-brake situation: Can I buy a house and still invest in real estate with little free cash? Please name some options and some good sources of information on how to do this effectively, efficiently, and most important, legally?
There is a school of thought that says no to buying a personal home; rather use one's savings and disposable income to invest in income properties. What I want to know is: are there other strategies that fall in between that might be possible? Can you buy a home and get started in purchasing income properties?
That being said, I think it would be great if there was an experienced investor that I could pay for their focused time once every two weeks or so to ask questions, bounce ideas off, offer guidance, etc. It turns out I am not allowed to post mentor requests on the Bigger Pockets forums. So, any advice on the idea (has anyone done this? I am not talking about expensive courses) and seeking one out would be appreciated.
We have been grinding at the career thing for some time. It has led to a decent lump of savings. But, we are probably in one of the most challenging counties in the state of California for real estate - Santa Cruz County. It is a geographically strapped area south of San Jose/Silicon Valley, with very limited and poor housing supply coupled with an unpopular local planning agency that is not customer service oriented because of restrictions on population density and water resources, etc.
At this point in our lives, we cannot just pick up and move our jobs to another state. For now, I think we need to try to make it work here. We are both great on paper, excellent credit, good savings, etc. The median house where we live is about $850k for a 2bed 1 bath 800-900 square feet, older home.
My goals are:
+Improve our living situation - we live in an old mobile home (500 square feet) and we are currently both working professionals. We are in a wonderful location but the poor ergonomics of the home are creating difficulty in staying on top of our busy lives. We need more space too.
+Time Freedom
+Financial Independence
My main ideas are:
+Buy a home with an ADU. Use the ADU money to help pay down the mortgage. We could eventually rent out both the main house and the ADU if necessary to pick up and move elsewhere. This honestly seems a good way to get started and improve our current living situation while still helping us get to the next step. It would be a home that we could hold on to for the long-term and purchase with the good jobs we have now.
+Use the comfort and stability to next focus on acquiring income properties.
However, my concerns with this house and ADU strategy before buying income properties are:
+The market is stabilizing and the house purchase would not likely give us equity from appreciation despite providing us with a more comfortable living situation.
+ My other concern is that it would eat into half of our savings, tying up cash, and our disposable income to acquire more real estate.
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Not trying to complain, just a bit stuck on how to move forward. I've been learning the local market for the past 6 years and ready to make a move.
If you have been in a situation similar to mine, I would like to hear what you did. I appreciate any solid advice! Thank you for your time.
