I am new to real estate investing, trying to purchase my first property (preferably a multi-unit). Like most young people wanting to invest in real estate, I have very little money.
Can any of you give some advice on how you bought your first property, and how you raised money for it? I would greatly appreciate it.
At the moment I am saving money from every pay check, with the hope to soon raise enough for a downpayment.
I hope you all have a great and successful day!
Reach out to family and friends. Present a plan and show them what you can do for them! How much interest can you pay them? Get in touch with a lender in your area and a hard money lender and just have a conversation with them.
I am in the same boat as you @Hermilo Garcia . Novice. Newbie. Wet behind the ears.
I asked a similar question here about a month ago...the wisest response I got so far (apologies if the person who told me this, reads this, and gets sad they didn't get tagged for credit)
1 - Learn all you can. Google. Ask questions on here. Look for meetups. Look for books. @Brandon Turner has a great book (The Book On Investing in Real Estate with No (and Low) Money Down) I bought it Amazon for a few bucks. Tons of others.
2 - Save money up. Like three to six months worth of gross pay. It's much easier to get into risky REI knowing that you have three to six (lots of experts say 9 to 12 months) of cushion. Cut back expenses (I am doing that now) and if you have to, pick up a side hustle or second job (as long as it doesnt affect your family life or health.) I work a regular job, and like once or twice every three months, I do a gig on weekends. I'm talking Putting-Ikea-Tables-And-Chairs-Together-For-Startups-Cuz-I-Need-The-Cash jobs.
I was all eager to jump in, "I got a dollar in my pocket, how do I buy a Multi-Family!"
Til reality hit me...gotta have a fall back cushion first.
And yes, I thought of asking my family for financial input, @Max Fisher , problem is...my extended family is so fraught with troubles and fragmentations, that I wouldn't even ask them to invest in a cartoon of milk with me.
Our first house was back in the 1987 which the homeowner was 6 months behind in his payments. I did a Quit Claim Deed and got the mortgage up to date. That was my starter home which today I still own and rent out. When that opportunity came around I was living with my in laws and saving every pay check to buy my first house.
Now on my second home purchase I and my wife each worked 2 jobs for 1 year to save money to buy our home and pay off our credits. What I'm trying to say is you have to work if it means getting a second job, or move in with your parents or in laws to keep your expenses low. You got to save money for the down payment. FHA is the way to go as you don't need as much for the down payment versus conventional loan that requires 20% - 25%.
@Max Fisher Thank you very much Max for you advice. I really appreciate it! I am definitely looking to getting to know hard money lenders and learn more about how to use Other Peoples' Money to finance my deals. Thanks once again.
Hey Tony. Thank you for your advice. Right now I find myself reading the Ultimate Begginer's Guide to Real Estate Investing, as well as any other book that gives an introduction to Real Estate investing. I think I will have to get a second job to save some more cash, and am defintely willing to put the work to make this real estate venture a reality.
Thank you once again, and I wish you the best in your feature real estate endeavours!
It is funny you mention that you were living with your in laws, because I am doing the same thing right now. I am living with my girlfriend's parents. An FHA loan is what seems more doable for me given my situation.
I see that you are from Florida. I lived there when I was younger, and am looking to move back there in a couple years.
If I may ask,
are you focused on buying and holding properties?
I do mostly Buy and Hold purchases. I'll do a flip if I'm not interested in the neighborhood where the house is located. But at the end of the day it's Buy and Hold.
im new and learning as well. I'm 28 making average pay and purchased a home with 5% down. Rented out the rooms which paid the mortgage and some utilities. after a year, purchased another with 5% down and rented the first. currently rent the rooms and again pay the mortgage/utilities and cashflow 200/month. living with other people isn't always an option, but no mortgage makes it worth it. after i get 2 years rental history, i can qualify for another loan and will probably buy a duplex and finally have a place of my own.
. @Brandon Turner has a great book (The Book On Investing in Real Estate with No (and Low) Money Down) I bought it Amazon for a few bucks. Tons of others.
This book was a huge help for me as well. I had no idea how many possibilities there are until i read this book. I am about to close on my first property and started with FHA, which didnt work out because someone told my banker false info which made me not be able to get the FHA loan. But if i hadnt read this book i wouldnt have thought to ask my mom to take some money out in a home equity line of credit to get me enough for my down payment.
Started with an FHA loan as well. Low down payment made it easier to manage until I built up some capital. As long as your living in a unit you can utilize an FHA to purchase a multi family. Good luck!
Hermilo, my first house was with a partner, We both had jobs that paid our own bills. We found a house that was undervalued due to condition and we talked to the bank and said our plan was all about reinvest, reinvest. no cash out. We were asking for purchase price 50% of current rehabbed market value. we were willing to put in rehab fees and rehabbed and rented. Hung on to this house for two years. Showed the banker we would do what we said. started looking for other houses. now have over 40 and closing on two this month. Still not taking money out. Still reinvesting and holding houses. Started using my IRA now for self funding. returns are great.
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