Louisville, KY · Member since 2015 · 68 posts · 7 votes
Good Morning everyone,
I have a question. So I have been working for the government for 5 years. I make a pretty decent salary (nothing exciting). I haven't purchased a home since I been working. So I see a Fannie Mae property back in my hometown (Alabama) for 26k. I am able to get a mortgage loan for 10 years with 4% interest to acquire the house. My thing is that I may use it for my first home then possible rent it. Do you think this maybe a good route to go. The monthly payment should come to $325. Basically a car note. I don't have a car payment and basically try to live a little frugal.
What you think?
Investor · Kansas City, MO · Member since 2013 · 465 posts · 170 votes
10y
Hold up and slow down the train. You are looking at a house you want to purchase as an owner occupied and not actually owner occupy it? That's fraud. Pure and simple. Don't do that.
Real Estate Investor · Mobile, AL · Member since 2016 · 41 posts · 10 votes
10y
I think that is very smart. Not sure what the stipulations are when buying a HUD owner occupant. I'm pretty sure you have to live there for a certain time frame before you can rent it out. Good Luck!
Real Estate Investor · Mobile, AL · Member since 2016 · 41 posts · 10 votes
10y
I'm sure if you have the utilities in your name and you show usage, who could argue against that? You could always say you travel for work? Haha I'm not sure if they ride by or not.
Louisville, KY · Member since 2015 · 68 posts · 7 votes
10y
Jared R. Oh yes, that was my sell pitch. I am sure it won't be that bad. I will find out more. But if the stips ask for it. I sure it won't be a problem.
Louisville, KY · Member since 2015 · 68 posts · 7 votes
10y
He was like bring 2600 down with a ten year mortgage with 4% interest. Maybe I can get them to take the stips off since it is a Fannie Mae house. But it is worth a try.
Real Estate Investor · Mobile, AL · Member since 2016 · 41 posts · 10 votes
10y
I do. I only do section 8 housing. Section 8 gets a bad name sometimes, but its a guarantee cash flow to me. I've had a few bad apples over the past 8 years, but once you get a system down, its awesome.
Louisville, KY · Member since 2015 · 68 posts · 7 votes
10y
Jared R. Oh yes that's the same thing I said. I am trying to get into it also. I just been reading and reading. It's better to have a decent section 8 than a decent renter who you have to chase down.
Louisville, KY · Member since 2015 · 68 posts · 7 votes
10y
Jared R. No plan but an idea. I am actually going to write it down. I want to own my first rental this year though. Can find it pretty challenging by myself but I will do it regardless.
Real Estate Investor · Mobile, AL · Member since 2016 · 41 posts · 10 votes
10y
Yeah I have a five year plan. I've written down at least 7 different plans seeing what plan would get me where I wanna be the quickest. It's pretty much having a cap rate of at least 37% and then doing the ladder effect with all the money made off the rentals and put them in more rentals. It's kind of the same concept as doubling a penny everyday for 31 days which is $10,000,000.00.
Real Estate Investor · Mobile, AL · Member since 2016 · 41 posts · 10 votes
10y
You know, Fannie and Freddie will allow you to have a primary mortgage and up to 4 other mortgages. At least it's like that in Alabama.
It's best with section 8 to have at least a 3/2 or larger. Only bad thing is, some banks won't loan money if the house needs a lot of work, but those are the best deals. Shop around with banks for the best deals and see what all they have to offer. Banks have there own stipulations outside of Fannie and freddie too.
Louisville, KY · Member since 2015 · 68 posts · 7 votes
10y
Jared R. Yes you are correct. I am going to double check. I will keep working hard and trying to save. I think the house I was looking at will be 3 beds and 1 1/2 baths. If the the mortgage guy will give me a loan for the 26k I can't beat that. Basically, I don't mind driving my little 95 truck around so I can use that money instead of a car note. I am from a rural town in Alabama so they have RD houses that goes for cheap also. Heck they even have mobile homes on section 8.
Flipper · Orlando, FL · Member since 2013 · 11 posts · 2 votes
10y
If your your just starting out , I would NOT do section 8 , do you live in the area , close to where the " rental"would be ? Does it need work , what's the going rents in the area , these are things you should definitely look into , I have multiple rentals . And have been thru the section 8 nightmare .
Real Estate Investor · Mobile, AL · Member since 2016 · 41 posts · 10 votes
10y
i think you need to keep your debt to income ratio low as possible. Borrowing power comes from that. Most banks will allow up to 43% DTI. Once you have a house rented out for a year, some banks will consider that income. Other banks need 2 years.all depends.
Biggest advice I can give for section 8, is meet the tenant yourself so you can get a feel for what type of person they are and you will need someone you can call to do small repairs. I have about 4 different people on standby at all times that are very reasonable with prices whennut comes to repairs. Ac and plumbing will be your biggest expenses.
When you rent out a house in the section 8 list on gosection8.com, you will start getting phone calls the same week. You can pick through a bunch of possible tenants. It's all up to you who you let live in your home.
Louisville, KY · Member since 2015 · 68 posts · 7 votes
10y
Nina Gibilaro hi Nina, well I don't have to particular go the section 8 route. Yes, I am familiar with the area. My sister stays like 3 miles from the location and my cousin stay a few blocks. I am harping on the idea of acquiring property of that sort vs buying a brand new car which is depreciable. The house really don't need much work. If any work my family does construction for a living. I am not interested in buying houses that need a major overhaul.
If you guys want to see an example of a house. I can send a link of ones that are similar.
Louisville, KY · Member since 2015 · 68 posts · 7 votes
10y
Yes my thing is that. If I acquire. I really don't have to rush to get someone into the house. Because I will keep my debt low. I work as an statistician/analysts on farmers financial plan so I guess that's why I have my frugal ways. Financial ratios on in my ball park. The way I see it is better than just going out to buy this vs being in the mall every week.
Investor · Kansas City, MO · Member since 2013 · 465 posts · 170 votes
10y
Hold up and slow down the train. You are looking at a house you want to purchase as an owner occupied and not actually owner occupy it? That's fraud. Pure and simple. Don't do that.