{"id":175124,"date":"2024-07-10T12:57:39","date_gmt":"2024-07-10T18:57:39","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=175124"},"modified":"2024-08-12T02:06:03","modified_gmt":"2024-08-12T08:06:03","slug":"college-graduates-can-still-buy-real-estate-and-succeed","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/college-graduates-can-still-buy-real-estate-and-succeed","title":{"rendered":"Homebuying Reality Check: College Graduates Can Still Succeed"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC2127965941\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">Are you a <\/span><span data-preserver-spaces=\"true\">new<\/span><span data-preserver-spaces=\"true\"> college graduate (or a concerned parent) wondering if <\/span><span data-preserver-spaces=\"true\">it is possible to<\/span><span data-preserver-spaces=\"true\"> buy a house?<\/span><span data-preserver-spaces=\"true\"> Spoiler alert: It is <\/span><span data-preserver-spaces=\"true\">absolutely<\/span><span data-preserver-spaces=\"true\"> possible!<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">It may be easier for someone further along in life<\/span><span data-preserver-spaces=\"true\">, with a more established financial situation<\/span><span data-preserver-spaces=\"true\">, but <\/span><span data-preserver-spaces=\"true\">that does not mean<\/span><span data-preserver-spaces=\"true\"> you <\/span><span data-preserver-spaces=\"true\">have no chance of qualifying<\/span><span data-preserver-spaces=\"true\"> for your first mortgage right out of college.<\/span><span data-preserver-spaces=\"true\"> There are many tactics that college students can actively pursue to <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/things-college-students-can-do-to-reach-financial-freedom\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">improve their financial position<\/span><\/a><span data-preserver-spaces=\"true\">, and they can continue the momentum into what I believe to be the best driver for long-term wealth: real estate investing.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Even if you feel like you are not in a position to buy your first house, there will be plenty of tips on what you can do today to <\/span><span data-preserver-spaces=\"true\">start improving<\/span><span data-preserver-spaces=\"true\"> your financial position and have far fewer worries when <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/business\/finder\/lenders\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">talking to a lender<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What Are the Barriers to Buying My First House?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">As a college student, you were likely scraping by month-to-month during the semester, saving up a few thousand dollars when you\u2019d work over the summers in a full-time, seasonal role. Well, at least that\u2019s what I was doing four years ago when I had no money, no assets, and very little imagination about what opportunities would be available.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">You will have the same opportunity as any other buyer in the market to qualify <\/span><span data-preserver-spaces=\"true\">to buy<\/span><span data-preserver-spaces=\"true\"> a home, but it will <\/span><span data-preserver-spaces=\"true\">certainly<\/span><span data-preserver-spaces=\"true\"> be more challenging. But that does not mean that you cannot do it!<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">You\u2019re likely already aware of some <\/span><span data-preserver-spaces=\"true\">of the<\/span><span data-preserver-spaces=\"true\"> barriers to buying a house as a new graduate, like having a limited credit history, a high debt-to-income ratio, and limited savings. Of course, if you read or listen to the news today, you will be completely turned off by <\/span><span data-preserver-spaces=\"true\">the idea of<\/span><span data-preserver-spaces=\"true\"> adding more debt to your balance sheet with a new mortgage. All you\u2019ve heard consistently is:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em><span data-preserver-spaces=\"true\">\u201cHome prices are way too high. Wait for the crash!\u201d<\/span><\/em><\/li>\n\n\n\n<li><em><span data-preserver-spaces=\"true\">\u201cWait for interest rates to come down. I\u2019ve never seen them this high in my life!\u201d<\/span><\/em><\/li>\n\n\n\n<li><em><span data-preserver-spaces=\"true\">\u201cInflation is not slowing down, making it impossible to achieve the American Dream.\u201d<\/span><\/em><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">Here&#8217;s a look at <\/span><span data-preserver-spaces=\"true\">each of<\/span><span data-preserver-spaces=\"true\"> these barriers and how to overcome them.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Limited credit history<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Being young, you will likely have very few expenses, which is <\/span><span data-preserver-spaces=\"true\">a great<\/span><span data-preserver-spaces=\"true\"> thing for your <\/span><span data-preserver-spaces=\"true\">personal<\/span><span data-preserver-spaces=\"true\"> finances, but having no regular payments <\/span><span data-preserver-spaces=\"true\">on a consistent basis<\/span><span data-preserver-spaces=\"true\"> will not affect your <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/credit-score-buy-house\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">credit score<\/span><\/a><span data-preserver-spaces=\"true\">. <\/span><span data-preserver-spaces=\"true\">There are a few payments that you<\/span><span data-preserver-spaces=\"true\"> may have already made that have established your credit history.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Do you have an existing car loan that you&#8217;ve made payments on? Making monthly payments on a car could help your credit status. Also, having an active credit card in your name can improve your score <\/span><span data-preserver-spaces=\"true\">as well<\/span><span data-preserver-spaces=\"true\">. Lastly, if you lived in an off-campus apartment and made rent and utility payments, that should help your score!<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I did not have any car payments when I was a college student, but having a credit card with <\/span><span data-preserver-spaces=\"true\">a very low<\/span><span data-preserver-spaces=\"true\"> credit limit ($2,000 or less) for my groceries improved my credit score dramatically with on-time payments.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Another regular expense <\/span><span data-preserver-spaces=\"true\">I would encourage<\/span><span data-preserver-spaces=\"true\"> you <\/span><span data-preserver-spaces=\"true\">to<\/span><span data-preserver-spaces=\"true\"> set up in your name is utility bills.<\/span> <span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> is not a huge expense and will be one for <\/span><span data-preserver-spaces=\"true\">likely<\/span><span data-preserver-spaces=\"true\"> the rest of your life.<\/span><span data-preserver-spaces=\"true\"> It\u2019s a good habit to start paying recurring bills on time directly in your name.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Limited savings<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">You likely have only worked summer jobs, internships, and part-time jobs on campus that did not bring in substantial income.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">One of the most common misconceptions <\/span><span data-preserver-spaces=\"true\">that<\/span><span data-preserver-spaces=\"true\"> I hear is that you need to have a 20% down payment. The average median sales price of homes sold in the U.S. was <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/fred.stlouisfed.org\/series\/MSPUS\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$420,800<\/span><\/a><span data-preserver-spaces=\"true\"> in Q1 2024. Saving 20% or just under $85,000 ($84,160, to be exact) could take you years, which makes it feel like the dream of homeownership is a long shot at best.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Did you know that you can put 3.5% down on a FHA loan and even 3% <\/span><span data-preserver-spaces=\"true\">down<\/span><span data-preserver-spaces=\"true\"> on a conventional loan with higher credit requirements? Let\u2019s go the FHA route at 3.5% because you likely do not have the best credit score at your age. If you put 3.5% down on a $300,000 home, you will need $10,500. Sounds much more attainable, right?<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I know this<\/span><span data-preserver-spaces=\"true\"> number still sounds like it will take a <\/span><span data-preserver-spaces=\"true\">really<\/span><span data-preserver-spaces=\"true\"> long time to achieve, but with only student loans as monthly expenses, how much <\/span><span data-preserver-spaces=\"true\">are you able to save <\/span><span data-preserver-spaces=\"true\">on a monthly basis<\/span><span data-preserver-spaces=\"true\">?<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">According to the National Association of Colleges and Employers, <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.naceweb.org\/docs\/default-source\/default-document-library\/2024\/publication\/executive-summary\/2024-nace-winter-salary-survey-executive-summary.pdf?Status=Master&amp;%3Bsfvrsn=b8ff91c4_3\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the average projected starting salary<\/span><\/a><span data-preserver-spaces=\"true\"> in the U.S. for the class of 2024 at the bachelor\u2019s degree level is $68,516. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> means you will earn $5,710 gross monthly, <\/span><span data-preserver-spaces=\"true\">will<\/span><span data-preserver-spaces=\"true\"> have a few hundred dollars of student loans, and have your first big-boy\/big-girl check in hand.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If housing is too expensive <\/span><span data-preserver-spaces=\"true\">to rapidly increase your savings<\/span><span data-preserver-spaces=\"true\">, <\/span><span data-preserver-spaces=\"true\">are you able to<\/span><span data-preserver-spaces=\"true\"> sacrifice the next four to five months living at home to save up your down payment? If you take one quarter out of the year to set up your foundation, you can save close to $20,000 and have the dream of homeownership on the horizon.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">High debt-to-income<\/span> ratio<\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Buying a home with outstanding student loans is <\/span><span data-preserver-spaces=\"true\">absolutely<\/span><span data-preserver-spaces=\"true\"> possible. When you talk to a lender, one of the <\/span><span data-preserver-spaces=\"true\">biggest<\/span><span data-preserver-spaces=\"true\"> requirements they will look for is a low debt-to-income ratio.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Your <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/debt-income-ratio-impact-investing-career\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">debt-to-income ratio<\/span><\/a><span data-preserver-spaces=\"true\"> (DTI) compares how much you owe each month to how much you earn. <\/span><span data-preserver-spaces=\"true\">Specifically, it\u2019s the percentage of your gross monthly income (before taxes) that goes toward <\/span><span data-preserver-spaces=\"true\">payments for<\/span><span data-preserver-spaces=\"true\"> rent, mortgage, credit cards, car loans, or other debt.<\/span> <a class=\"editor-rtfLink\" href=\"https:\/\/www.hud.gov\/sites\/documents\/4155-1_4_SECF.PDF\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">According to the FHA<\/span><\/a><span data-preserver-spaces=\"true\">, the relationship of total obligations to income <\/span><span data-preserver-spaces=\"true\">is considered<\/span><span data-preserver-spaces=\"true\"> acceptable if the total mortgage payment and all recurring monthly obligations do not exceed 43% of the gross <\/span><span data-preserver-spaces=\"true\">effective<\/span><span data-preserver-spaces=\"true\"> income.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Let\u2019s <\/span><span data-preserver-spaces=\"true\">go back<\/span><span data-preserver-spaces=\"true\"> to the average projected monthly gross income of $5,710 and break that down further into a hypothetical mortgage approval. With your starting salary at $68,516, your maximum monthly housing expense would be $2,455.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Now I understand that <\/span><span data-preserver-spaces=\"true\">at this writing,<\/span><span data-preserver-spaces=\"true\"> interest rates are hovering around 6.5% to 7%, which is one of the driving factors in your affordability.<\/span><span data-preserver-spaces=\"true\"> I have done a little bit of extra analysis with the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/mortgage-calculator\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">BiggerPockets mortgage calculator<\/span><\/a><span data-preserver-spaces=\"true\"> to help you understand how much you can <\/span><span data-preserver-spaces=\"true\">actually<\/span><span data-preserver-spaces=\"true\"> afford:<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Analysis of a 30-year mortgage<\/span><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Purchase Price:<\/span><\/strong><span data-preserver-spaces=\"true\"> $300,000<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Down Payment:<\/span><\/strong><span data-preserver-spaces=\"true\"> $10,500<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Interest Rate:<\/span><\/strong><span data-preserver-spaces=\"true\"> 6.5%<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Total Monthly Payment (PITI):<\/span><\/strong><span data-preserver-spaces=\"true\"> $2,329.83<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Principal and Interest Payment (PI): <\/span><\/strong><span data-preserver-spaces=\"true\">$1,829.83<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Taxes &amp; Insurance Payment (TI):<\/span><\/strong><span data-preserver-spaces=\"true\"> $500<\/span><\/li>\n<\/ul>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Debt-to-income ratio: $2,329.83 monthly debt \/$5,710 monthly income x 100 = 40.8%<\/span><\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What Options Are Available to Me?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">So, what can a young prospective homebuyer do? Consider these options.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Apply for income-driven repayment<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">If you have federal student loans, applying for an income-driven repayment (IDR) plan is one way you can lower your monthly expenses. These plans base your payment amount on your household size and income. In some cases, payments can be as low as $0.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> is number one on my list by an absolute landslide. After seeing my <\/span><span data-preserver-spaces=\"true\">own<\/span><span data-preserver-spaces=\"true\"> sister successfully reduce her monthly student loan expenses after being approved for an IDR, she <\/span><span data-preserver-spaces=\"true\">was able <\/span><span data-preserver-spaces=\"true\">to<\/span><span data-preserver-spaces=\"true\"> comfortably qualify for her first mortgage<\/span><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I won\u2019t go into exact numbers here, but she is a physical therapist, and professional school was <\/span><span data-preserver-spaces=\"true\">certainly<\/span><span data-preserver-spaces=\"true\"> not cheap after undergrad. Now, she makes a great living and has her first home with her husband, <\/span><span data-preserver-spaces=\"true\">with<\/span><span data-preserver-spaces=\"true\"> a <\/span><span data-preserver-spaces=\"true\">very<\/span><span data-preserver-spaces=\"true\"> modest monthly expense to continue paying off her student loans.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Needless to say,<\/span><span data-preserver-spaces=\"true\"> student loans did not stop her from acquiring her first house, and she works her dream job day in and day out, assisting hundreds of patients annually. You can <\/span><span data-preserver-spaces=\"true\">absolutely<\/span><span data-preserver-spaces=\"true\"> have your cake and eat it, too.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Apply with a co-borrower&nbsp;<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Applying with a co-borrower means that your lender will consider both applicants&#8217; DTIs. <\/span><span data-preserver-spaces=\"true\">When you qualify with a co-borrower, the lender will use the lowest median credit score of all co-borrowers on the loan, so this <\/span><span data-preserver-spaces=\"true\">is only going <\/span><span data-preserver-spaces=\"true\">to <\/span><span data-preserver-spaces=\"true\">really<\/span><span data-preserver-spaces=\"true\"> positively affect you if DTI is the barrier to entry<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\"> You still need to <\/span><span data-preserver-spaces=\"true\">work on improving<\/span><span data-preserver-spaces=\"true\"> your credit score if you are worried!<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">It can be <\/span><span data-preserver-spaces=\"true\">extremely<\/span><span data-preserver-spaces=\"true\"> advantageous to apply with a spouse, partner, family member, or friend, with all parties fully understanding the upside and downside of what a co-borrower\u2019s responsibility is.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">A co-borrower <\/span><span data-preserver-spaces=\"true\">is someone who<\/span><span data-preserver-spaces=\"true\"> applies for a loan with you and shares joint responsibility for repaying the loan. Both borrowers on the application are responsible for repayment.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> sounds like only bad news for the co-borrower, but if you <\/span><span data-preserver-spaces=\"true\">are able to<\/span><span data-preserver-spaces=\"true\"> structure a deal to benefit both parties, you can create a situation where everyone wins.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">How have I done this? I have a co-borrower on my second property due to my DTI not qualifying for an additional monthly payment! <\/span><span data-preserver-spaces=\"true\">My co-borrower has no money <\/span><span data-preserver-spaces=\"true\">into<\/span><span data-preserver-spaces=\"true\"> the deal, but without having their name on the loan (and title), <\/span><span data-preserver-spaces=\"true\">there is no way I would<\/span><span data-preserver-spaces=\"true\"> have been able to qualify.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I gave up equity to close on the deal and <\/span><span data-preserver-spaces=\"true\">have an agreement<\/span><span data-preserver-spaces=\"true\"> on an aligned time horizon for refinancing or selling the property to free up my co-borrower, removing the debt and responsibility in their name.<\/span> <span data-preserver-spaces=\"true\">I did this because I was closing on a property only 11 months after closing on my first home, and I <\/span><span data-preserver-spaces=\"true\">had no<\/span><span data-preserver-spaces=\"true\"> rental income on a tax return <\/span><span data-preserver-spaces=\"true\">yet<\/span><span data-preserver-spaces=\"true\"> to offset my first mortgage.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">On paper, a lender looked at my monthly expenses (not including any rental income) and denied my initial request to take on another mortgage! Having a high credit score, money saved up for a down payment, and having a co-borrower to improve my DTI checked <\/span><span data-preserver-spaces=\"true\">off<\/span><span data-preserver-spaces=\"true\"> all the necessary boxes to move the deal forward.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We are two years into the partnership, and though I have been the only one to immediately see a return, the more this property appreciates over time <\/span><span data-preserver-spaces=\"true\">will only benefit my co-borrower<\/span><span data-preserver-spaces=\"true\">, leading to a nice payday in a few years.<\/span><span data-preserver-spaces=\"true\"> Ultimately, they will make an infinite return by having no money in the deal and allowing me to use their name!&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">House hacking<\/span><\/h3>\n\n\n\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/real-estate-investing\/house-hacking-strategy\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">House hacking<\/span><\/a><span data-preserver-spaces=\"true\"> refers to using your primary residence as a rental property <\/span><span data-preserver-spaces=\"true\">and is<\/span><span data-preserver-spaces=\"true\">, in my humble opinion,<\/span><span data-preserver-spaces=\"true\"> an option available to anyone leading you toward the path of financial freedom in the most impactful way.<\/span> <span data-preserver-spaces=\"true\">The income you receive can minimize your mortgage payment, <\/span><span data-preserver-spaces=\"true\">maybe<\/span><span data-preserver-spaces=\"true\"> offset your mortgage, or put cash flow in your pocket <\/span><span data-preserver-spaces=\"true\">just<\/span><span data-preserver-spaces=\"true\"> to live!<\/span><span data-preserver-spaces=\"true\"> It\u2019s the simplest way to become a real estate investor and an easy way to improve your monthly cash flow.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For example, I bought a three-bedroom condo, paying $1,500 <\/span><span data-preserver-spaces=\"true\">a month<\/span><span data-preserver-spaces=\"true\"> in total housing expenses, and used my two additional rooms for rental income. My tenants each paid $750, and I lived there for free while <\/span><span data-preserver-spaces=\"true\">also<\/span><span data-preserver-spaces=\"true\"> building equity.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I get asked almost every week: \u201cIf you could start over, what would you change?\u201d&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I don\u2019t have any regrets to date on my investing journey, but one thing I <\/span><span data-preserver-spaces=\"true\">really<\/span><span data-preserver-spaces=\"true\"> wish I had done starting <\/span><span data-preserver-spaces=\"true\">out<\/span><span data-preserver-spaces=\"true\"> was to pursue <\/span><span data-preserver-spaces=\"true\">house hacking<\/span> <a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/finding-multifamily-properties\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">multifamily<\/span><\/a><span data-preserver-spaces=\"true\"> properties instead of single-family homes. I have seen almost every benefit <\/span><span data-preserver-spaces=\"true\">that a<\/span><span data-preserver-spaces=\"true\"> multifamily house hacker would have except for my acceleration to scale using the rental income from my primary residence.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">As mentioned, I needed a co-borrower to continue scaling my portfolio at a more rapid pace due to DTI restrictions caused by my inability to offset my mortgage with rental income.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If you <\/span><span data-preserver-spaces=\"true\">have the ability to<\/span><span data-preserver-spaces=\"true\"> pursue a small multifamily property (two to four) units, you <\/span><span data-preserver-spaces=\"true\">are able to<\/span><span data-preserver-spaces=\"true\"> use <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/guide.freddiemac.com\/app\/guide\/section\/5306.4\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">75% of the gross monthly rent or gross monthly market rent<\/span><\/a><span data-preserver-spaces=\"true\"> to help offset any DTI concerns.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In my example, I show you the possibilities of using an FHA loan at 3.5% down, but recently, there has been a much more <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/fannie-mae-launches-5-percent-down-payment-program-for-multifamily-properties\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">lucrative product announced by Fannie Mae<\/span><\/a><span data-preserver-spaces=\"true\">. On Nov. 18, 2023, Fannie Mae began accepting 5% down payments for owner-occupied two-, three-, and four-unit homes.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">House hack three to four owner-occupied small multifamily properties over the next five to six years, and I guarantee you will be a millionaire before you hit 30. Giving up the white picket fence as your first home to focus on your financial position for the long haul will provide you with massive opportunities in the future to find your dream house.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Do not let these barriers stop you from building your financial foundation. Let them be the <\/span><span data-preserver-spaces=\"true\">toughest<\/span><span data-preserver-spaces=\"true\"> obstacles you will face in your financial life, and I guarantee you will see financial goals start to grow and your position improve dramatically year over year.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">You are young, have a limitless amount of opportunity, and if you had the drive to successfully complete a vigorous education over the last four years, there is absolutely no doubt in my mind that you will be able to buy your first home right out of college. Money may not be rolling in as fast as you imagined it would in your first job. Use one of your first real-world experiences and \u201cslap in the face\u201d light your fire to improve your financial position\u2014on your terms and in your control.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_5698c5c5f9a0801c83e9d74f852e1a4f\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_a9b52793b8bf17c07c46ebb199b03a11\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-theme-gold-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Get the Best Loan Today<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Find trusted, <em><strong>investor-friendly<\/strong><\/em> lenders who specialize in your strategy. <\/p>\n\n\n\n<p><\/p>\n\n\n\n<div id=button-custom-event-block_2915635b7e2059e7fb5d53a3c28380d4 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/business\/finder\/lenders\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Lender Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/college-graduates-can-still-buy-real-estate-and-succeed&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Find a Lender<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Marketplace-Blog-Blocks-Lender-v3.png\" alt=\"investor friendly lender, investor friendly real estate loans\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/college-graduates-can-still-buy-real-estate-and-succeed&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>In an environment of high rates, high prices, and low wage growth, can new college graduates really succeed with real estate?<\/p>\n","protected":false},"author":613743,"featured_media":175127,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524,7119],"tags":[],"class_list":["post-175124","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-for-beginners","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/175124","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613743"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=175124"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/175124\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/175127"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=175124"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=175124"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=175124"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}