All Forum Posts by: Alex Brookbank

Another thought, you can get into a single family (as a primary residence) with low-ish down payments without using an FHA. Then, your second property you could both apply for the FHA loan to increase your borrowing power, and get into a nice multifamily.

@Art Maydan Your first sentence made me laugh. I can relate.

I'm biased to house-hacking multifamily properties because that is what I did. Turnkey is the most hands off, while single family is the easiest model to learn/operate. I think your plan makes sense.

If your long term goal is freedom, than it's probably easier to make it by staying local (maintain control) and digging into the local market, just my take. Turn key investing with single family houses seems to make sense if you have extra cash, don't want headaches (in theory), and want to invest in real estate. I think your COC returns will be capped, whereas, if you are doing buy and holds, and can find solid deals and manage yourself, you can reach 25-40% returns. If they need a little work, or you can upgrade your tenant profile.

Another thought is to buy a single family now with 5 or 10 down, then a little later buy a multifamily to house hack with an FHA loan. Then rent your single family.

This is what I did:

Property 1: FHA Duplex (house hack) 3.5% down

Property 2: 20% down owner occupied triplex

Property 3: Sold property 1 to purchase 4 unit with 25% down

Property 4: Re-using FHA loan with a 5% or 10% down payment

This manuevuring of the pieces has put us in a position where we started with little cash and now my wife and I are saving a serious chunk of change every month (no kids, dual incomes .... she's a teacher too, btw :) ).

Ive noticed sometimes in the MLS remarks section the agent will note that the seller is open to owner financing, etc.

@Leandro Rodriguez Hey- from Cincinnati here. Lots of deals look good on paper in that area, and it seems a lot of non-Cincinnati natives on BP focus on it. Generally speaking, the area is not trending up. This is not an appreciation play. If you have good cashflow and can manage tenants properly, then the deal may make sense. There are areas in Cincy that are trending up, and this area is not it.

If your OBJECTIVE is to buy in low working class and Section 8 areas for cash flow, then you're in the right area. If you're looking for stable C areas ... you're probably in the wrong location. Just want you to be aware. Don't be mislead by Trulia's crime stats.

Another book out there called the "unofficial guide to real estate investing" ... not sure of the exact title or authors, but I've read it, and it's pretty good too.

@Account Closed I like the book on rental property investing by Brandon Turner and Investing in Apartment Buildings by Matthew Martinez. I know what you mean about Lindahl's book, I think he is a guru type. Book is OKAY, but definitely sales-y.

good luck @Shawn Smith

Yeah.. maybe it only applies when you're buying a non-FHA multifamily.

@Michael Abernathy The answer is relevant to your situation. Why are you thinking about selling? Does it make more sense to you to invest in your backyard?

At the end of the day, if you can redeploy that money and achieve a higher rate of return... I'd pull the trigger. I just did this actually. Sold my first FHA property that was cashflow positive to invest in something that will have a higher cash on cash.

@Justin Priestly this is a great idea. I'm 29, and my wife and I did this exact plan at 26. We are moving into our third place this summer.

my general thoughts

-You can get a duplex, triplex, or quad. I would focus on a triplex or quad, since that will cover more of your costs. If want to live in a property that "looks like a home" you'll probably have to stick with a duplex or triplex.

-Find a real estate agent that works with first time home buyers. They will understand FHA. If they are experienced enough, they will have a lender or broker they'll refer you too.

-I'd look for a good buyer's agent, and a mortgage broker to work with (this has been my experience, and it has worked).

-Look at MLS, drive around the areas you want to live in. Also figure out what type of tenants you want - and what price you are willing to pay. This will determine which areas you should investigate. Living on the edge of an "A" area is a good strategy, you'll pay less of a premium and with the right marketing strategy you can get the same type of tenant profile.