I am currently in college and am looking to purchase a duplex straight out of college to build equity and eventually refinance and take that money to roll it into my next investment property. I know my greatest hurdle will be finding financing straight out of college. What are you tips to positioning myself straight out of college to enhance the likelihood of a loan without having to pay extra interest or etc? Thanks so much!
Unfortunately lenders are going to want to see an employment history. And you won't have one just as you get right out of college. So, the simple route would be to rent a cheap place and save like crazy so you 1) have a nice down payment when you can buy and 2) you have an employment history.
Or, look for creative deals, such as an owner carried property.
Jon Holdman, Flying Phoenix LLC
Keep credit clean and do what you can to build it. Reduce consumer debt. If difficult, Dave Ramsey's program helped me a lot. Then save some money for a down payment and get a job with income you can show. Then keep good records of units rented as banks look for two years of Landlording experience before they count rental income toward your debt to income. Keep contracts to show lender your experience.
Instead if cashing out you could rent out your unit in two years and get owner occupied financing on another one (lower down payment) and move Into that one.
To get cash out you will need significant equity. That may take a while if you aren't putting down a huge down payment. Unless you can force appreciation somehow.
Just a few ideas.
Do an unconventional purchase using creative financing. Look for self-financed multi-plexes where you can live in one yet, rent out the other units to cover your payments. Look for property that is undervalued and get a hard money loan teamed up with an equity partner to do a 100% financing where you will live in a unit and be the property manager.
Think out of the box. Don't do the norm, do the extraordinary!
God Bless You!
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