Author Topic: Look into RE investing or wait until more settled?  (Read 1020 times)

squatman

  • 5 O'Clock Shadow
  • *
  • Posts: 56
Look into RE investing or wait until more settled?
« on: April 22, 2014, 09:00:27 PM »
Hi everyone,

I'm a total noob to this world, but enough wealthy people here and elsewhere seem to be involved in real estate that I want to learn more about it. The big question I have is fairly simple: do I have the means to get involved with real estate now, or should I wait until I have a house of my own? My concern primarily revolves around not having enough cash to both save for a down payment and get involved with investment properties. If the answer is simply "go for it" or "read every book in the FAQ and you'll know what you can do" that's great. I'm just hoping I can solicit 30 seconds from a few people to maybe save myself many hours of reading - thanks!

A few things to help explain my situation:
 
- I'll be living in the DC area (Maryland side) for the foreseeable future and will likely buy a house there with my wife and child (almost 2 y/o now) in the next 3 years.
- We expect to save between 60 and 90k for a down payment by mid-2017 on said house beyond 401k and Roth IRA contributions, so I'm not sure how much extra cash I'll have around (I have maybe 10k now).
- We have great credit and at least one very secure job.
- Research, learning new things, and due diligence are definite strengths (both PhDs).
- I am currently whatever the opposite of handy is.
- I don't know what I don't know in the field of real estate, but I'm reading every thread on this forum and moving to biggerpockets soon. The Building Wealth book in the FAQ is also on its way.
- Our income will be 170-180k gross this year and should push 200k by year 3. Our current debt is about 50k of student loans at < 3.5% rates.
- I think my preference is towards a long-term outlook for this endeavor.

If more info is needed I'm happy to provide it.

Bearded Man

  • Handlebar Stache
  • *****
  • Posts: 1142
Re: Look into RE investing or wait until more settled?
« Reply #1 on: April 23, 2014, 07:13:13 PM »
Wait until more settled. If something happened to your jobs, even with a 60-90K dp, you would have to raid retirement accounts to float you from what I can tell. That's a lot of risk IMO. You'd risk losing your dp and all the money you paid into the mortgage every month otherwise.

I'd rather put 3.5 % down and have cash to float me for a decade than put 50% down and have little cash on hand and risk losing it all if one big emergency arose. Even worse, what if you both lost your jobs and health insurance then suddenly develop a major health issue?