How can I get started with little to no money down?!

10 Replies

Hey everyone , so here’s my story . I’m a Steamfitter out of Pittsburgh pa . And I’m looking to get involved in these rental properties . I know how to do all the work on the places myself. But I’m having a hard time getting a loan from the bank since i do not own my own home . But due to my job field I’m not ready to purchase my own home due to not knowing where I’m going to end up. But I’m looking for other routes on how to get started ! Any suggestions ?!

Not owning a home won't disqualify you from getting a mortgage on a rental. There something else wrong with your income, credit, job history or debt/equity situation. Just ask the lender(s) they'll tell you. 

The cheapest way into real estate is to buy a property to live in since you can do as low as 3.5% down. You can either do a live-in flip (fix it while you live there to resell or refi), house hack (have roomates) or buy a 2-4plex and rent the other units while you live in yours. After 1 year you can do it all over again, and again, and again. Its slow, safe and works and builds up your credit, portfolio and gives you experience. 

I house hacked a 4 plex. I put 3.5% down and used an FHA loan. I borrowed the entire down payment from my TSP (401k equivalent) by using a TSP loan. The result was no money out of pocket.

@Tyler Herman As far as doing it over and over again after a year of living there, I believe you would have to refi out of your FHA in order to do this with the low money down loan, correct?

@Shane Pawich You may want to talk to different lenders. Each one has its own criteria. If you can't get a loan, ask why. And work on improving your situation. Good luck! 

Unless I am terribly mistaken, I believe Bill E is correct and you can only have one FHA loan outstanding at any time. However, there are other low money down programs available. I believe I purchased my duplex with 5% down. As noted above, speak to various lenders (banks, credit unions, mortgage brokers , et al...)

Okay I’m sorry let’s me rephrase sorry guys, i can get approved for a mortgage with no problem , but if i go to a sheriff sale i need money in hand Correct? So i was applying just for a personal unsecured loan since i don’t own my own house they would not approve me. I tried to put my truck as the Lien rather then a house and they weren’t having that to do. So if i just buy the home with a mortgage do i have to live in i the to rent it out ? I was under the impression if i took out a mortgage i could not rent it out?

Sherrif  sale is a whole other deal. Yeah you’ll need cash for that. You're going to need to talk to probably several hard money lenders although I have no idea if they’d lend for something like that.

There are several different types of mortgages. Think you have a little bit of research to do. Luckily bigger pockets has lots of good info to get started 

@Shane Pawich  As @Tyler Herman said, if you are going to auction you will need money in hand. I work with Investors who when strapped for cash do use a hard money lender, but unless you pay it off quickly, it can be a very costly proposition. You can househack with possibly a low down payment but you really need to talk to a "creative" lender. Feel free to reach out to me further. Thanks...Gary

And sheriff sale in PA for a HML can be tricky because Deed isn’t always recorded before monies are due, which means you can’t get a loan.

Private money or partnering is your best bet

Have you looked into mobile home investing? I have heard that it is a good alternative if you have little money 2-5k to get started. There is a youtuber who does just that his channel is called john Fedro.

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