Hi Jacob, I agree with the comments above. Best to start small and gain experience before you go big. Great thing is, you have the capital set aside to fund future deals!
If I were in your shoes, I would do the following:
- set 6 months worth of income aside in a HYSA to save it for a rainy day (this will help shield you if you lose your job, or if something goes horribly awry with your investment properties)
- open a Bank on Yourself life insurance policy (this is a specific type of high dividend paying whole life insurance where you can borrow against the cash value in your policy at any time and the money will continue growing as if you never took out a loan. It's a great way to BE the bank yourself, although you do pay simple interest to the life insurance company until you pay back the loan. This also allows you to buy life insurance at your early age in better health than you will likely be in the future. If you think you'll want a policy once you're married with kids to protect your family in the event something happens to you, then I would recommend thinking ahead and getting it now. Once you buy this policy, set it aside and this can be a financing source you use in the future for more deals.)
-the fun part: buy a property to house hack. You could buy a 2 family and with the new Fannie Mae guidelines, put 5% down on a conventional loan. Buy an existing property and if you find one that needs some love, it allows you to fix it up and force appreciation so that it's worth more in the future but you're getting it for a better price now.
- Start with that one property. Live in it for a year and set the remainder of your reserves aside, ideally in a HYSA so that it is there in a years time when you need it. After a year, buy the next place...maybe a 3 family and house hack again. Putting 5% down and buying a property a year will allow you to acquire properties quickly while still scaling wisely.
Take all of this with a grain of salt, it's solely what I would do in your position. I would also recommend seeking out some mentors to help guide you. I personally use and recommend Tardus - a financial coaching program where you are assigned a coach that works one on one with you to help guide you through your financial decisions. I've found this immensely valuable as it gives you someone to bounce ideas off of while still making all of your own decisions and having control over your own investments.
Phew, that was a lot. Feel free to message me if you'd like to talk further about any of this. Best of luck on your investment journey, you're certainly starting on strong footing!
