Nashville, TN · Member since 2017 · 12 posts · 6 votes
Hello all! I'm a 26 year old Vet, current college student, and brand new to the forum, and have been looking into starting my real estate portfolio for about two years now. I'm looking for a multifamily property (no less than 4 units) within a 3 hour drive from Nashville (Looking at Memphis at the moment). Ultimately, free cash flow after setting aside 10% into a repair fund will go to finance more investment properties, etc.
I have about 10K saved up, another 12k in the stock market, and good credit- I just have no idea if this plan is feasible. Granted, math isn't my strong suit, but the deals keep coming off as "Too good to be true".... So, I suppose the question is "Can it be done, or should I wait 3 years to raise another 10k?"
Also search this forum for Multi family in the Memphis forum, there are different opinions.
House hacking is a great option, As VA you can buy with lower LTV and lower interest rates. no brainier IMHO at your age. you should buy in the best possible location if you can get good loan terms.
More then 4 units is Commercial lending so sticking to 4 plex is probably your best option.
Real Estate Investor · Memphis, TN · Member since 2016 · 940 posts · 695 votes
9y
Hey @Tyler Gibson - Congrats on starting on the REI path! Not sure how you are planning on financing a MF deal with only 10k. Even if you pull the 12k out of stocks, that only leaves you 22k for a down payment and nothing for all the other costs or repairs. Not saying it can't be done but not sure how you were planning on doing it. There may be special VA loans for commercial property. But I don't know. You might want to look at some single family properties and get a VA loan on them. Do you currently rent? What about house hacking instead? Just I thought. Keep us posted!
Real Estate Investor · Memphis, TN · Member since 2016 · 940 posts · 695 votes
9y
@Tyler Gibson - this post may be helpful: https://www.biggerpockets.com/forums/20/topics/170502-my-story-of-buying-a-commercial-property-with-a-va-loan
Nashville, TN · Member since 2017 · 12 posts · 6 votes
9y
House hacking is looking more and more like the only way to really breach into the REI path for me at the moment, and the VA will insure the loan in that case (theres a 4 unit property in Memphis for about 600k that I've been looking at). Budget is limited on my end, which severely hamstrings my efforts. I've had an offer in the past to have a family member finance raw land for about $70-75k, which would put my comfortable budget closer to 80k assuming it works in my favor.
As for starting out with so little capitol, the only way I figure to make a purchase is with significant commercial loan and seller financing, and no small modicum of good luck.
Real Estate Investor · Memphis, TN · Member since 2016 · 940 posts · 695 votes
9y
House hacking is a great way to start! We flip the houses we live in. Great way to build up some capital (though moving is a pain). Figuring out financing is always an important part of the deal! You will learn a lot in this process!
Real Estate Agent · Fort Collins, CO · Member since 2016 · 246 posts · 142 votes
9y
Hey @Tyler Gibson and welcome. I am glad we started investing when my husband was still in the USN, we had had the idea for some time and I'm glad we pulled the trigger when we did. We are in the civilian world now without the security net of the military and I'm glad we are adding to our portfolio because civilian jobs don't seem secure as a military contract. Anyways, we invest in Memphis and I've seen MF properties listed with our turnkey partners there.
It can be done, depending on what kind of property you are looking at. Get comfortable analyzing properties and making sure the numbers make sense according to your criteria. I would make sure to do due diligence on any property you look at to make sure it isn't in a war zone where variables may eat away potential cash flow.
Also search this forum for Multi family in the Memphis forum, there are different opinions.
House hacking is a great option, As VA you can buy with lower LTV and lower interest rates. no brainier IMHO at your age. you should buy in the best possible location if you can get good loan terms.
More then 4 units is Commercial lending so sticking to 4 plex is probably your best option.
Nashville, TN · Member since 2017 · 12 posts · 6 votes
9y
I've recently reached out to a few local REIA's and some friends of the family that have been flipping houses in Nashville- hopefully something will shake from the trees. I'm hamstringed financially, but certainly want to put in the leg work! Thanks for the advice, everyone- everything helps!