Hi All - My wife and I would greatly appreciate some advice as I believe we're starting to suffer from some 'analysis paralysis' based on all of our reading, listening, etc. over the years about various/best strategies to get involved in real estate investing. We are committed as a couple to invest in real estate for the future appreciation and cash flows whereby we hope to retire early, enjoy a nice lifestyle, and not be entirely dependent upon retirement accounts, etc if we stop working. I'm going to provide some personal details in the hopes those with opinions can have some more clarity on our situation. Thank you in advance for your replies!
My wife and I are early 30's with 0 debt of any kind. Currently we have no children, though we are considering kids in the future. Furthermore, we are fortunate enough to have nice paying jobs whereby our combined income is $350k-$400k. Both very stable. We max our traditional retirement plans (401k's, IRA's,) and contribute regularly to a brokerage account. We have a significant portion of savings set aside, but are not convinced plowing 20%+ down into a primary residence is a best practice at this stage to complement our early retirement goals. We live in AZ and particular areas seem to be appreciating rather quickly YOY however (Scottsdale, Arcadia). We are currently renting a SFR but 100% of this is covered through a living allowance I negotiated with said employer. We are starting to feel our money isn't 'working' enough for us by just saving money each pay cycle. Here are our options as we see it, and I'd appreciate some insight as to what a best path forward should be:
1) Buying a multi-unit (1-4), and house-hacking by living in a unit for a year.
Our concern here is the property is 100% occupied, we have no opportunity to move in and qualify for creative financing by occupying it, and/or raise rents accordingly. Also, if we did want to move into a primary residence to build equity in an area we like within the next 3-5 years, our concern is that a bank would view the debt to income ratio as unfavorable
2) Buying a SFR in the rapidly appreciating area we enjoy here in AZ, rent it out for a few years to build some equity, and then move in
Our thought here is at least our cash would be 'working' for us while we still had virtually no living expenses in our rental
3) Buy a SFR in the area while applying our unique version of the BRRRR method due to our circumstances
If we closed on a property that needed a bit of work, rehabbed it lightly, and refinanced, we're not sure if it would make more sense to rent it out after that, or just move out of our current lease and enter the property. If we did rent it out, we're not terribly concerned about covering the new REFI note because our living expenses are so low and would be complemented by the tenants rent
4) Rent to own
I'm not sure we can truly find these in the areas we're looking but in theory it would seemingly be a good fit. Our living expenses would be continued to be paid for via our living stipend while we built equity in our primary residence within the area we like. That future equity and the fact we held onto a large cash position means we'd still have the funds from our W2 jobs to pursue other opportunities in RE while simultaneously.
Thank you all in advance for reading this, and we hope someone out there has/had a similar background and can weigh in on their chosen path forward.
