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The way a lot of people I know who fell into it was buying a house, living in it, then outgrowing the house. When moving, don’t sell the house and just rent it to someone. Some investors purposely do this to get lower rates because a primary house rate is lower than an investment property rate.
Also, you need to decide what kind of investor do you want to be. Are you willing to find new tenants and call contractors to make repairs or do you want to passively invest.
Instead of asking your friend to explain everything to you. Ask him if he wants to form a partnership that you both contribute to (you can work out the details on ownership.
Chief
Bigger Pockets is a great website to start learning about real estate. Also, there’s tons of knowledge on YouTube.
Step 1 is saving a down payment. You can buy houses in the Midwest / South with $25k to $50k of down payment. If you’re going to live in the house (house hack or duplex), you can get away with 3.5% down FHA.
Chief
Maybe extremely rural parts… but not anywhere that people want to live.
California is one of the worst states to be a landlord, so I wouldn’t consider California for rental properties.
Also - my friend is very protective of his investments, so asking him is kinda out.
I mean I’d just approach him in a very human way. Say you’re inexperienced and you admire his investment practices and you’d love to pick his brain on how he decides on properties, and that you have capital you want to deploy as well and see if he has any ideas. People love talking about themselves usually, especially their success stories. Flattery works!
Where is he buying?
Nashville, Florida, and California