Hey!
First let’s just try and get crystal clear criteria so you can go out there and have people in place to start looking for these things for you. Are you looking for a house to just rent out rooms to the people you are currently living with? Or are you looking to get a triplex/quadplex and rent them out the other sides?
I think having the mindset of the other people will help me take care of the property is a dangerous mindset to be in. It is your invest with your name and your money in the property. Thus it is your responsibility. If anything happens to that property it’s not on them it’s on you. Whether you move away or not if you want someone else to help you take care of the property I recommend a property manager. They are valuable pieces to be used to your advantage. Even then you’re still going want systems in place to manage that property manager and that property. Again your responsibility. If anything goes wrong it’s nobodies fault but your own.
I recommend talking to mortgage lenders and real estate agents now and creating a plan together that way everybody is on the same page. Good agents/property managers can refer you to solid lenders and contractors they have worked with before and have track records with.
With two months left on your lease it’s not enough time to get a plan together find a good solid agent, property manager,( if you choose one) and lender. Then expect them to find a property that needs a ton of work at a great price that meets the qualifications of a 203k loan. Then the rehab on the property would take 1-2 months alone depending on how bad the property is and how well you can manage your contractors. So I think you need to sit down and create a timeline whether you extend your current lease or sign another shorter one but creating a timeline then passing that along to your agent and lenders will help you with a plan.
I think the loan you're talking about is a 203k loan which is an FHA loan. They give you a loan based on the after repair value of the house. Then they keep an escrow account for the rehab amount that gets paid out to the contractors. The property will be fixed up to FHA standards which means it will be a solid property because they have a lot more boxes to be checked than normal conventional loans. With you doing the rehab you have to be constantly managing those contractors and making sure they are doing everything correctly and they aren't getting paid and doing no work. Again if anything goes wrong nobody else to blame but yourself. Your money, your property, your responsibility.
As for where you want the investment property, Where do you want to live? How far is too far for you to drive to work? What type of area do you want to live in? What works for one person doesn’t always work for you and what works for you doesn’t always work for them. You can invest anywhere as long as you can make the numbers work. Make that a part of your crystal clear criteria.
Investing in real estate can mitigate a lot of the risk that comes along with investing. People throw money into the stock market but can’t control the stock market. Can’t make it go up or go down or estimate what it will be worth when they’re ready to sell the stocks. There is no control there. In real estate there’s forced appreciation. There’s buying properties at a discount. I can run the numbers to see if it’s a good deal or not before I buy it. I can be fairly accurate with repairs and closing costs and the after repair value because I can get evidence that supports me for all of those things. You can’t do that while investing in anything else. That said it’s a lot more hands on than anything else. A lot more steps. A lot more headaches. A lot more control. Real Estate is very forgiving. You could do a lot wrong now and hold it for 10 years and just with appreciation or costs of rents going up each year then sell it then and still look like a genius. You could do a lot wrong, lose a ton of money, and never want to invest in real estate again.
I say these things not to discourage you but to prepare you and make sure this is really what you want to do. Don’t just jump in with no plan and expect other people to help you because that’s how you drown. Don’t spend years planning either and never invest. Plan just enough until everybody is comfortable and on the same page then execute. I hope this long drawn out message helps!
