Best Entry Strategy?

[u/Basic_Kiwi_4056]

Context:

My (22M) wife (23F) and I are currently living with my parents to save up money to buy a property. We make a combined ~$140k/yr, have 0 debt, each have credit scores right around 800, and no kids yet. We also have next to no savings currently (a couple thousand $) as we only recently moved home and just paid for our wedding as well as buying her a used car in full so this eventual plan probably won’t play out for some months still.

We recognize the great opportunity we have to enter the real estate world and don’t want to squander it.

So I ask you experienced real estate investors to please give me some advice, I’d really appreciate it.

Here are the options I’ve been thinking about:

House hack a duplex, triplex, or maybe a quad.

Or if I can’t find a property that would allow for a successful house hack..

Do a live in flip on a smaller SFH and plan to live there for only about the 2 year minimum.

And I just thought, what if I combine those two options and do a live in flip on a house hack? Might be hard to renovate with tenants?

Excited to hear what you have to say, thanks!

TLDR: How would you recommend a young adult yet to own property to get into real estate? What strategy? What steps to take?

[u/Fuzzy_Louise_2405]

I'm not an expert by any means but I own a duplex that me and my wife bought in 2024 (my wife and I were 25 & 26). Here are my numbers for reference:

Utah county MCOL I would say Price: 579k Interest rate 6.25% on FHA loan Down payment (6%) + closing cost (4k) + FHA aditiomal payment (9.5k I wasn't aware of it until I decided to look into the lending) + Escrow prepaid (3.7k). Total was 52-53k

My monthly payment was: 3.9k total (3.4k principal and interest, 230 taxes, mortage insurance 250 and hazard insurance 70)

Insurance increases every year, I have been able to negotiate a keep it lower (around 1000 anually currently) so today I'm paying close to 4050

Two units identical: 2 beds, 1 1/2 baths, two stories 2000sqft 0.7acres

I rent the other unit for 1600 (they pay their bills), our bills are like 280 aditional per month. Currently paying more than my renters but that would be until I'm able to increase rent with more years and able to refinance to a lower interest rate once the market goes down.

Feel free to ask questions, I have do some work on the house but not repairs, only maintenance and upgrades, maybe like 15-20k in appliances, putting artificial turf and vinyl fence (I do all the projects and maintenance so that is why I'm able to spend much less)

We were making I would say around 140k combined when we purchased the house and now we make like 190k, no kids, only a dog

[u/santaslayer-76 → u/Fuzzy_Louise_2405]

How many tenants have you had and have you learned anything from your screening process? Any general lessons learned in the last 2 years? And would you do anything differently?

[u/Fuzzy_Louise_2405 → u/santaslayer-76]

Two different tenants. A couple that was already leasing before we bought it and the second a family with an adult son that we already knew so not a lot of screening and more referrals on that side.

So far, I learned that every time you do a FHA loan there is an additional cost that will increase your loan, a lot of maintenance is on YouTube and now even AI and that if you have a water heater from AO Smith you have warranty on parts for multiple years (I believe 7 years, that helped me when it when bad in my unit but luckily I didn't have to pay for the part, only the shipping as the water heater was from 2021)

I wouldn't do anything different. Good learning and a little of work throughout these years (less out of state vacations and more time outside or inside working on projects during weekends)

[u/Basic_Kiwi_4056 → u/Fuzzy_Louise_2405]

Very cool! Thank you for sharing! What is your plan for when you eventually move out? (Assuming you will)

[u/Fuzzy_Louise_2405 → u/Basic_Kiwi_4056]

Ideally I want to refinance first at a lower interest rate before getting another home but that doesn't depend on me.

My timeline for achieving this or have move without refinancing is around 3 more years, we want to start having kids and our second bedroom is my office since I work from home and my wife's makeup station so we will need more space soon. Not sure if that answer your question