Since starting to read MMM, I have gotten more and more interested in real estate as a viable way to generate income, but always thought that it would be something years in the future for me. However, I recently started browsing foreclosures in the area while at work, and have found several great deals, ranging from $30K-$100K for homes of various sizes, from a 1BD apartment to a Multi-family house. With a mortgage, and based on what I have gathered so far, the highest monthly mortgage payments would come in around $850, just the same as my current rent payment on my 1BD, and if I was able to get a deal like the $39K apartment, it would be closer to $300 a month.
With prices like these, I am thinking that is it really worth taking a look at. I have two different scenarios that could work for me.
1: I get a 1BD and live there on my own. Not income generating, but would significantly reduce my housing expenses, and if/when I decide to move, I can use this apartment as a rental apartment.
2: I get a single family house. I use one room and rent out the others to roommates. This would help bring in income, but part of the reason I am in a one bedroom now is because I like my privacy.
3: Get a multi-family house. This would probably be most profitable, but at the same time, I would be taking on a lot. I have never been a landlord before, and I am not handy at all, though I hope to learn. The costs seem to be much higher for this, and the stakes much greater. For my first foray into real estate, I am not sure if I'd want to take on this much responsibility.
As of now, I am leaning towards the 1st option, the 1BD apartment. However, the other part of my question is, does it make sense to take on a mortgage while I am also paying student loans? I cannot see a downside here, as I would be saving myself a great deal of money on rent, while aquiring equity. Can anyone tell me if I am missing something glaringly obvious? Any insight is appreciated for a first time real estate buyer!
ETA:
Another part of my question is, what sort of expenses can I expect while fixing up a foreclosure. This one seems to be in pretty good shape, and my father and uncle are both very handy and can be paid in beer and pizza, so I can save on labor. Obviously I will get a home inspection, but are there any large expenses I should anticipate?
The 1BD in question I am looking at looks to be in pretty great shape actually; beautiful hardwood floors and the basic structure seems ok. The bathroom has a large hole in the wall by the tub, and the tile could probably use redoing, the paint in the rooms is atrocious but I love painting. Barring any huge plumbing or electrical issues, I can't think of anything else that I would need to do. Any insight on this? Can post pictures of the apartment if that's helpful!