Property investing

I am currently looking into buying a multi family, living in one side and renting the other. I am not really concerned about market depreciation because this property would be for cash flow generation. With an FHA loan you can put down as little as 3% which is great when buying a cashflow property. The rental market is very healthy and interest rates are low enough that the rental income on some of these properties covers the mortgage and then some. The key is to take the excess cash and put it in a conservative investment vehicle. When you build up a big enough pot for another down payment you buy a second property (ideally with multiple units). Bear in mind that on the second property you will not qualify for a FHA loan so you will need to put up between 10-20% for the down payment. However you will now be renting both units from the first property. ROI potential in this scenario is great.

Haven't cranked serious math on this, my initial perception is that it's actually good to put down some level of equity to reduce interest expense / principle repayment to max cash flow (could be wrong)

A no cash (or little cash) down plan would see most if not all of the rental income going to service P+I. Of course, the P will become your home equity though the downside is that this equity is locked away in the house and will only be available to you in a sale down the future versus getting cash rental income upfront if some equity was put in.

Any market you are looking into? Houston seems to have a good rental yield (but less price appreciation potential). On the other hand, Chicago's rental yield is lower but potentially has a appreciative market in 5yrs term.

Any resources you are tapping to help with the math and local real estate intel / analysis?

in.

Unless you have enough units where it's economical to hire a property management company, being a land lord sucks. I would highly discourage most people from becoming a land lord.

I'm sorry. I thought you just told me that I had no experience and to "gtfo". Do you want to admit that you're some idiot college student talking out of his ass?

1. ) Virginia Tech 4ever made a great point..being a landlord sucks. Both the job function and having to deal with people.
2. ) There are still (1-2 million?) homes that have not been foreclosed upon since the banks don't want to deal with more foreclosures and the market simply cannot handle more offloading.
3. ) Keep in mind that a sizable percentage of the baby boomer population will be dying in the coming years, leading to more homes being labeled for sale.

Check out some publications. IRR.com has some decent stuff; however, the most important thing you could look at would be specific geographic locations. Without that information, none of us could probably give you a solid, confident answer.

Invest in real estate equity through buying and selling real property or through other more liquid investments