How do I find a partner? Or gain the money for a MFR?

3 Replies

How would I go about finding a partner? Or quickly raising the money for a MFR.

My name is Shane, I've lived here in Portland for 2 years, and after months of researching, and saving, and waiting patiently, I'd like to purchase a MFR this winter and also house hack it. I currently have 6,000 in my savings, my savings rate is approx. 2,000 per month, I'd like to buy, by March 6th, 2018. I'm currently renting, and would like to purchase before having to move into another lease term.

I've been keeping my eyes on a few MFR's, they seem to range from 375, to 650. I've been Pre-Approved for a Conventional 5% down on a MFR.

Given I find a place I decide on for approx. 550,000, I'm going to need 28k for a down payment. And closing costs, etc. 

If i'm able to save around 13,000 by that time, at the rate things are going. Is there any way I can come up with the remaining amount? via investors, hard money loan, etc.? Or am I just going to have to suck it up and keep saving, or find another first timer investment opportunity? Maybe flipping a SFR? or house hacking a Duplex?

Hey Shane,

I think you’ll find it hard to get a loan from anyone as a first-time investor who is owner-occupying. If you did find someone to loan you the difference, my guess is the rate would be exorbitant and the lender probably wouldn’t fund the loan if you’re borrowing part of the down payment.  I could be wrong (and if I am, please tell me who is funding those deals so I can talk with them.) 

But, you don’t need to be discouraged. You’re totally on the right path. I’d focus on getting into a duplex (and there are some in that price range,) getting roommates, building equity through improvements, and continuing to sock away cash. With rents where they are, you’ll be living rent free if you rent one side and have a roommate or two. You’ll need to set aside some cash each month to account for capex, vacancy, and repairs, but at your savings rate you’ll continue to increase your reserve. A year will fly by, and you’ll be ready to move up. 

That’s my .02 

Originally posted by @Mathew Wray :

Hey Shane,

I think you’ll find it hard to get a loan from anyone as a first-time investor who is owner-occupying. If you did find someone to loan you the difference, my guess is the rate would be exorbitant and the lender probably wouldn’t fund the loan if you’re borrowing part of the down payment.  I could be wrong (and if I am, please tell me who is funding those deals so I can talk with them.) 

But, you don’t need to be discouraged. You’re totally on the right path. I’d focus on getting into a duplex (and there are some in that price range,) getting roommates, building equity through improvements, and continuing to sock away cash. With rents where they are, you’ll be living rent free if you rent one side and have a roommate or two. You’ll need to set aside some cash each month to account for capex, vacancy, and repairs, but at your savings rate you’ll continue to increase your reserve. A year will fly by, and you’ll be ready to move up. 

That’s my .02 

Huh, ok. That's not a bad strategy. I could definitely do that. I have been approved for a Conventional at 5% already and an FHA at 3.5%. At 3.5%, if I can find a Duplex for around 350k, my down will only be around 11-12k, which I can do. And if i'm working for a broker by that time, I may be able to save my self a lot of closing fees i'd normally have to pay. Maybe getting in and out of the deal for only 15k, and living free of charge, or for a very small amount.

If any come your way let me know, i'd definitely be interested in taking a look. Also, i'm trying to network and see what opportunities are out there, i'm currently working on my Real Estate License, if you know any brokerages looking for entry level agents, or showing specialists let me know!

Regards,

That’s great Shane! Congrats on working towards your license...it’ll help your investment for sure. PM me and I’ll give you some thoughts on brokerages. 

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