South Jersey Newbie

[Jenny Serrano]

I am currently saving for a DP on a property. I am a complete novice and was under the impression that one could get a 5% conventional loan as an investment property. Now I know it's at least 20% in my state of NJ. My goal was to get a $125k to $150k SFH and fix up what was wrong to rent out. I currently live with my mother who is low income and grandma who is ill; therefore, pursuing an FHA loan is not a viable at this time since I assist them with expenses. It would be difficult for me to continue assisting them as well as take on additional expenses of my own moving into a primary residence. I feel overwhelmed because I was ready to go on in on a property for $125k with a 5% DP and closing costs, only to find out that it was supposed to 20%. It kind of shocked me a bit and made me question how I can afford to do this. I don't mind waiting to grow my DP, it just feels like on this economy and how things are going, how can we safely save for these goals to get into REI and also travel through muddied areas such as having a child, health issues or other things as well as tenant relations once a property is yours? How do you maintain the grit to hold onto your goal when it seems like it might not be for you? How do you start this process from start to finish without being stressed, and if you are stressed, does that mean this isn't for you or can you grow a stronger attitude? I just feel lost...any help would be appreciated.

[Melissa Justice]

@Jenny Serrano,

Hey Jenny - I'm originially from NJ too! Happy to see you here! 

Everything you're feeling is completely valid. Real estate investing can feel overwhelming at the start, especially when the rules around financing seem to shift as you learn more. You're not alone in this.

What you're doing—supporting family, trying to build a better future, and educating yourself—is already incredibly brave. Most people never get this far.

I want to add: I am familiar with some low down payment programs through certain credit unions that offer as little as 5% down on investment properties. However, they often come with higher interest rates, which usually means negative or break-even cash flow until you refinance into a different loan product. These programs also come with stricter requirements, typically:
- U.S. citizenship
- 740+ credit score
- DTI (debt-to-income ratio) under 45%

So while these can be an option, you’ll want to be cautious and run the numbers conservatively.

You’re building grit right now. The fact that you’re not quitting, even when it feels heavy, shows that this is absolutely for you. That discomfort you're feeling? It's part of the growth process.

Keep asking questions, run the numbers, connect with others, and take one small step at a time. You’ve got this and you’re not doing it alone. 

Best of luck,

Melissa