Starting off and need help

4 Replies

Hello,

My name is Naeem and I am 22. I am at the point in my life where I would like to establish wealth and want to start taking on real estate. I work a full-time job but I am still staying with my parents. I would like to purchase a house in the Chicago land area and live in the house while renting rooms out to tenants to pay off my mortgage. Obviously, I don't have thousands of dollars but I know that are ways that I can do this without having to have 50 thousand down or so. What are my first steps to doing so. I have read many books and listened to many podcasts but do not know what exactly to do. I'm also skeptical about trusting investors because I'm aware of digging myself in a hole. Everyone that I run into just wants to tell me "educate myself" and "drive around to find properties for them". I get that I'm just now starting off but I need a little more in-depth info.Please help and be specific.

Thank you,

@Naeem Barbour welcome!!! 

If the goal is to buy a house hack, start building a plan now to house hack You don't need other investors.

1) Understand financing options and get approved.

       - if you have a job, walk into any bank and ask about home loans.

- you will need 3.5% via FHA or 5% via conventional for down payment.

       - example: $3500 at 3.5% for a $100K property. $5000 at 5% for a $100K property. 

2) Once you know your budget/approval #, you can locate areas in the city which are in your price range. study the area and get to know property values, new developments, attractiveness for potential roommates, etc.

3) Craft a plan for attaining the down payment/closing cost needed.

4) Contact/locate a broker

5) Start making offers

6) Close.

Good Luck!

Originally posted by @Naeem Barbour :

Hello,

My name is Naeem and I am 22. I am at the point in my life where I would like to establish wealth and want to start taking on real estate. I work a full-time job but I am still staying with my parents. I would like to purchase a house in the Chicago land area and live in the house while renting rooms out to tenants to pay off my mortgage. Obviously, I don't have thousands of dollars but I know that are ways that I can do this without having to have 50 thousand down or so. What are my first steps to doing so. I have read many books and listened to many podcasts but do not know what exactly to do. I'm also skeptical about trusting investors because I'm aware of digging myself in a hole. Everyone that I run into just wants to tell me "educate myself" and "drive around to find properties for them". I get that I'm just now starting off but I need a little more in-depth info.Please help and be specific.

Thank you,

Welcome to the site. I'd say house hacking a 2-4 unit with an FHA loan (only 3.5% down needed) is a great way for you to break into the game.

Hi Naeem, I think what Ibn proposed is a great place to start. This gives you an idea on where to start looking based on your cash starting point.

Also, talk to a few real estate agents and find one that can relate to your strategy. Be upfront about your time line and money saving, that will help build the relationship between you and the agent.

The agent can set you up on a MLS search based on your criteria (price range, number of units, location, etc) and you can begin getting an idea of what it will take.

I grew up right next door to you in Park Forest, Best of luck!!

I'd just like to echo the advice of @Ibn Abney and @Donald Aleshire and say that getting your financing lined up is going to be the most important first step. If you need to work through some different scenarios with a lender, then shoot me a DM and I can refer a couple great lenders for multiunits. 

FHA, 3.5% down, may be a great scenario but you need to consider neighborhoods that allow you to do that.

Welcome to the community!

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