How do you get money to buy your first multi family dulplex

32 Replies

Hi, My name Dakari and I’m trying to get into real state investing

@Dakari Mitchell

Congrats on making the decision to get into the game.  You're in the right place.  This is a great place to learn.  Lots of great resources and great people.  There are many ways to play this game.  Do you know what your approach will be?  Fix n Flip, Single family, multi-family, commercial properties?

My 9-5 yob 

Typically a newbie cannot get 100% financing.  However, if you house hack (owner occupy) the RE you can get close to 100% financing assuming you are good for the loan.

For obtaining the 5% (maybe 3.5%) that is necessary for a down payment for owner occupied you likely need to save it.  This is not a huge hurdle but may take a little time.  Note, many people that believe they do not have the money to buy a RE are driving cars that are worth more than what they need to purchase an owner occupied RE.  In addition, foregoing going out (eating, clubbing, concerts, sporting events, etc.) as often could result in savings that can be applied to the down payment.

Small sacrifices can help many obtain the necessary down payment.

Save now, reward yourself when the nearly passive income permits.

Good luck

welcome follow newbie, i have been listening and learning from the podcast and webinar and also the books from bp,on the various ways to invest and so for the FHA loan seems to be the best way to start with little money down.

@Dakari Mitchell

Congrats! First step I would say is do you track your income? If you are able to , you may be able to house house hack a multi family. It is a great way to get started if you are looking to buy and hold. 

Typically a newbie cannot get 100% financing.  However, if you house hack (owner occupy) the RE you can get close to 100% financing assuming you are good for the loan.

For obtaining the 5% (maybe 3.5%) that is necessary for a down payment for owner occupied you likely need to save it.  This is not a huge hurdle but may take a little time.  Note, many people that believe they do not have the money to buy a RE are driving cars that are worth more than what they need to purchase an owner occupied RE.  In addition, foregoing going out (eating, clubbing, concerts, sporting events, etc.) as often could result in savings that can be applied to the down payment.

Small sacrifices can help many obtain the necessary down payment.

Save now, reward yourself when the nearly passive income permits.

Good luck

@Dakari Mitchell hey, I am not the most experienced but I am continually learning to be at least well educated. And I firmly believe that’s it Is the most important step. So how to aquire money for your first multi family to invest is to get the education an invaluable asset. From education I think we can gain actionable steps to make things happen. So I would learn how to earn more and hold on to more. So create a high savings rate and if the income is low focus on getting it higher then back to the savings rate. In summary my opion two steps to get started on your multi. 1.educate 2.execuate I recommend BP, and if your not into BP money its perhaps all the information you need to gain capital to deploy in real estate.
Originally posted by @Dakari Mitchell :
Hi, My name Dakari and I’m trying to get into real state investing

We saved the money over time.

@Dakari Mitchell Great decision to head this direction. Six months in and 2 duplex properties later, we invested two ways to start out. First duplex was acquired with HELOC. My wife and I have W-2 income that allowed for purchase + rehab. We will acquire long-term financing at 12 months leaving 30% in equity and potential to collect PP+Rehab+cash if we operate well. Second duplex was private money partner at 50/50 in first 24 months max, plan to long-term finance at 12 months increasing our equity to 70/30. We have given up more equity in first two deals than we will later on in our business. Go get it! Best of luck! Todd
Read “ the richest man in Babylon “ then come back and answer your own question .

@Dakari Mitchell welcome to BP. Congratulations on starting your REI journey!

One option would be to house hack a single family home and get your feet wet but if your like me and don't like roommates you can do flips or wholesale to get money. Another option would be to save and wait till you have enough to house hack a multifamily property. 

I agree with @Bjorik Mutize Raise the money!! Like you @Dakari Mitchell I'm new to the multifamily game so I'm learning what I can and will take the necessary actions to make it happen.  You're at the right place here on BP, I'm learning so much in just a few weeks since I started  plugging in. Funny I joined last year but didn't take advantage of the info but now I'm ready, Happy Investing!!

@Dakari Mitchell my wife and I have been saving for the last 2-3 years in preparation for a career change and to invest in real estate. You got money by making money and saving it.
@Dakari Mitchell welcome fellow newbie! Well I might be new I can say that my best advice is to do my 3 step hustle approach. 1. Hustle with your education. Learn everything you can off of bigger pockets. Different strategies for creative investing, running numbers and creating a plan to move forward with you real estate goals. 2. Hustle with saving. Take a step towards saving where you can in your daily life, do side jobs for different landlords or anything in between to build extra cash and knowledge. Save! Save! Save! 3. Hustle with networking. Put yourself out there! Get on here, visit your local REIA, fb etc to find out who's in your area you can connect with. Local investors and realtors will help you gain knowledge that you need to have to find great contractors, title companies, portfolio lenders etc. This is not going to be easy but if you have the drive then you can accomplish anything! Goodluck ✌✌
@Dakari Mitchell Work more than the average person. Spend less than the average person. Save the difference. Invest in a property. Repeat the process until goals are attained. People overcomplicate success.
@Dakari Mitchell start working and saving. You need to have a down payment and a good credit score.
@Dakari Mitchell Congrats on deciding to dive into real estate! I would suggest reading Scott Trench’s book “Set for Life”. It does a great job of putting personal financials into perspective and guides you towards your first deal.

Welcome! Mine certainly isn't the most innovative strategy, but I'll post anyway as a fellow newbie...

1. Started with a pile of student loans and an Engineering degree

2. Landed myself a solid 9-5, put in the time and pulled in my 3% annual increases to pull together a down payment

3. Used mint.com's budgeting tools to streamline finances (this was/is invaluable to me- it's goal setting is automated and simple as logging on to check my progress) NOT AFFILIATED IN ANYWAY, I JUST LIKE THE SERVICE AND IT'S FREE 

4. Secured FHA financing with a local CU, low interest rate, low down payment

5. Found turn-key duplex and moved into the 2nd floor (appropriately named house-hacking 'round these parts)

6. Worked to keep it occupied since with solid tenants (been very lucky so far). Rent covers expenses and allows me to save a bit for CapEX each month (thanks BP calculators)

Still have plenty of student loan debt left, but with REI, the end feels that much nearer.

Best of luck  on your new adventure. And feel free to reach out; happy to expand networks. 

Regards, Tyler

@Dakari Mitchell , welcome fellow newbie! Congratulations on getting started. That, as the many members state, is the first most important step. I am looking forward to learning more but am currently working on the saving and networking piece. House hacking as a viable first step sounds great. Also getting practice analyzing properties in your chosen market is priceless experience as well. The podcasts and webInars are great! Again, welcome and congratulations on the commitment!
@Dakari Mitchell , I forgot to mention. If you are a veteran and you have your VA Guarantee, you can usually get into your property (up to 4 unit multIfamily) with no money down. But, the home must be your primary residence...house hack required 🙂. Check out the BP podcasts and forums on this.

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