I am new to Bigger Pockets and this is my first post. I have an endless list of questions but I'll start with my most nagging. Let me first explain my current status. I am currently renting and I plan to buy my first home before my lease is up in June 2015. I am going with the, buy and live in first investment property, route to avoid the 20% down that comes with an investment property. I will stay there for about a year or so then make it a rental property. So my questions are, how do I know the price is right? And does this sound like a good plan in the first place?? Thanks in advance!
Welcome to BP!!
Here are several different ways into housing for less than 20% down. I recommend researching them and buying a 2-4 unit property that allows you to live as close to free as possible.
Here is a link to my blog about new MFH (2-4 places) investing:
Bring everything back here to BP for evaluation. We LOVE to evaluate deals and look for possible pitfalls. Expect tons of great questions. BP will make your investment properties easier to find, purchase and maintain.
VA Loan (http://benefits.va.gov/HOMELOANS/index.asp) Rural Development Loans (Renovations MAY be included)
3.5% AND Renovations
FHA 203k loan (http://portal.hud.gov/hudportal/HUD/program_offices/housing/sfh/203k)
Homepath Owner Occupied
Not as cheap, but come with renovation options attached to the loan:
Homepath Investment (SFH only)
Homepath Investment (Duplex only)
Homepath Investment (3-4 Unit Buildings)
Definitely take the time to do your market research especially since you plan to live there. Be sure it's an area that can fit your needs as a resident as well as a neighborhood you feel comfortable with.
Welcome @Mark Albano !
There are different options when looking into an investment property. If you plan on continuing to invest in the same area you plan to live, it would probably be in your best interest to really learn the area and what things are selling for in the area. Another way, although unpopular with BPers is to enlist the services of a real estate agent. A good agent will allow you to leverage their knowledge of the area with less stress on you to learn as much. Just try to find an agent who not only does retail sales, but also invests in real estate as well. It will usually help remove some of the emotion from the decision. Oh and probable most importantly is if you plan on making it an investment, treat it like an investment until you create enough wealth to buy your primary residence on emotion.
Hope it helps and good luck!
@Aaron Montague multi families were my first choice. But they are nowhere to be found in NC like they are up north. Single families are much more high in demand. Especially in my area. But knowing I can put deals on here for second opinions is great to know. Thank you for the advice!
Stick with Homepath. They offer a 10% down on investment SFH.
Looks like 2 places currently in Davidson. Both overpriced as investments I would guess, but I don't know anything about your market that Craigslist won't tell me. Looks like high end 3/2s in Davidson should rent for $1400+.
Is that the home of Davidson college?
Yes this is the home of Davidson college.
Student rentals can garner big bucks. They generally can be rented by the bedroom pushing rents hundreds above what a similar house would rent to a family for.
That sounds like a great idea. How would I approve college students? On the assumption that the average college student doesn't have the best credit score or history and probably not a great income either.
You don't approve the college student, you approve their parents. Each parent signs a lease for the ENTIRE apartment each month.
3 kids move into your 3/2 place.
Total rent is $2000 ($600 each for the 2 that share the bathroom, $800 for the "master" with it's own)
Each of the 3 sets of parents co-signs the lease for the entire $2000. Search "student rentals" here on BP for the various responses to "I don't want to be responsible for another kid's rent." Vet the parents as if they were living there, 3x total income, first/last/security available, etc.
College kids are actually pretty good tenants. They are easier to scare than more seasoned folks, but they want the same thing, to send in their checks and to be left alone. Especially on weekend mornings.
The dumb little details will make you a great "college" landlord:
Don't mow the lawn before 1pm on Saturday and Sunday.
Treat them like adults.
Ask them for their side of the story after the neighbors complain. This WILL happen no matter how quiet the kids are. Inevitable a group of drunks will go wandering around the neighborhood at 330am and your tenants will get blamed, right or wrong.
Ask them early in the new year about their plans for the summer.
Get them to sell your place to the next round of tenants. We were able to do this just by asking. We had 0% vacancy for 2 years. The first year folks had their friends move in.
Thank you explaining that. It's something I haven't thought about, but it sounds like something I would definitely do when you put it in perspective like that. Thank you!
Any time. Happy House Hunting!!
Remember to bring your deals to the analysis forum as well.
We have a student rental that we bought about a year ago and it has been a great experience. We found a good deal by driving for dollars or basically driving around looking for houses for sale. We found a for sale by owner that was a good deal and not advertised at all. Its a duplex, and we live in half and rent half, which has been amazing. Our renters cover 93% of our mortgage and when we move out, since the unit we live in is bigger and nicer (=higher rent), cash flow should be pretty good.
We have 3 students living in the other unit, and each of them had a parent co-sign on their lease.
We wrote about our experience in our blog (http://www.myrehabandrentals.com/?p=121) if you're interested in more info.
Student rentals = awesome investment!
@Mark Albano you may just need to expand your search area a bit. I know it may not be a perfect location for you, but there are more properties available in and around Charlotte.
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