Updated about 3 years ago on . Most recent reply
Problems facing while starting out
Hello, I'm very excited about starting to invest into real estate. Last week I went to look at a Condo that need some repairs and that could leave some profits after all the repairs are done. Now I'm trying to find a lender to get a Hard Money Loan from. This is the step that I'm stuck at. I have no money to put down, the lender offers between 80% to 90% LTV, I'm trying to figure out where I can get that rest of the money in order to be able to purchase the property. I have also been looking at houses that I could be able to house hack by getting a mortgage and rent out the rest of the rooms. But I don't have money for a down payment. I'm in the military and I can use the VA Loan benefit. but I'm stationed in Camp Pendleton, California, where the houses are worth around 500k. And if I get pre approved I might just get like 150k for a house, and I will not be able to find a house for that price around here. So I was thinking of getting a big loan for a house with 6 bedrooms where I could live in one of those but again, the price is 550k and I doubt I will be approved for that amount with a VA loan according to how much I earn and the DTI. Then I was thinking to just get a house out of state with this VA Loan but It is for primary residence so I can't because I have to be living there for at least a year. A DSCR Loan could work for this I heard, I'm not really familiar with it but the problem again would be the down payment. Which I don't have. These are kinda the problems I'm facing and I'm stuck without a solution since It's gonna be my first time trying to get a house. If you guys could share with me some insight or what would you guys do.
Most Popular Reply
As an active duty service member I would recommend trying to use that VA loan, you can use income from other units to qualify for the loan; get a 2 to 4 unit property, honestly in San Diego it will most likely be a 2 unit. I am assuming you get BAH and do not live in the barracks, if that isn't correct, you're right, you won't qualify for a mortgage in the San Diego area.
Everyone is different, I would not invest in a condo or try and do a hard money deal on my first purchase. I understand the desire to get into real estate and start making things happen but if you genuinely have no cash you could put yourself in a bad financial position. Emergencies occur and you need to be able to pay for them, closing costs almost always have to be paid out of pocket, you can always use someone else's money but it can be hard to find someone who wants to give money to someone with no experience.
I would recommend saving some money prior to purchasing a property. Investing in real estate with no money is typically a bad idea, especially for those that are brand new and learning.