Advice For a Newbie

[Patrick OLeary]

Hello Bigger Pockets family, I'm 23 years old and about to graduate from a university in the Midwest come this May. I've been wanting to invest in real estate for a couple years now, but have been putting all my energy into school. Upon graduating I have a job lined up in big tech with above average average income.(not bragging, giving you a vision of my situation) I also have a good chunk of money in crypto and savings.(again, not bragging) I have a few questions. Do I need proof of income for the first year or just have proof of a paystub to be eligible for a loan? Also, given the current market situation, do I wait it out risking interest rates to rise even more or go for it and house hack a 2-5 unit multi family property? Lastly, with a FHA loan from my understanding I only have to put 3.5% down. For example if I put 20k down would I be eligible for a 515k loan after closing?

Thank you for reading this, have a good day/night! 

[Brad Jacobson]

Hey Patrick, welcome to the RE club and way to get started so early!

1. If your work is W2, you'll likely only need two to four paystubs to verify income.  If your work is 1099 or you want to use commission-based earning to increase your loan amount, you'll likely need at least one full year of consistent earnings and a tax return to back it up.  

2. Never wait to buy real estate.  Buy real estate and wait.  No joke, I thought I was buying the top of the market when I bought my first rental in 2017.

3. Find an excellent lender. FHA can be as low as 0% down but 3.5% is typical. However, based on your income, you'll want to explore other loan options like a conventional 3% or 5% down as well. A great lender will walk you through all these options, show you the fees included, and help estimate your mortgage which will help you better gauge your cash on cash return with a good house hack or traditional rental.

Good luck!