Houston, TX · Member since 2018 · 5 posts · 2 votes
Hi everyone!,
I am currently a university student working as an undergraduate engineer living in Queensland, Australia. However i grew up (and plan to move back to in 14 months) in Houston Texas!
I am wanting to get into buy and hold real estate in order to generate passive income and create a prosperous future for myself. As property is quite expensive here (and i dont have the best credit in Australia) would it be a smart move to buy a property in the Houston area this year?
I generally go back to Houston one to two times a year to visit friends and family who live there. I am going to back in June and would love to buy some property as i would have saved about 10k USD by that point.
Has anyone done this? Or can lend any advice on this topic.
New to Real Estate · Waukesha · Member since 2019 · 96 posts · 43 votes
7y
Well if your going for a loan. Most Banks are going to want about 20% for investment properties. Also would need a team or at least a property manager.a upside if you do get a place there every time you visit you can write that off as a business expense. Your credit will want to be above 720 they will also look at your debt to income so may have to look at that as well usally i think most banks do not go past 50% matters on bank and could be wrong on that
Real Estate Agent · Houston, TX · Member since 2018 · 65 posts · 49 votes
7y
@Tyler Crowell, @Anthony Bellesbach is correct that you will need at least 20-25% saved up (or private money partners) to work with most lenders. $10k would probably get you around $40k in financing.
My team can serve as a source of deals in the Houston. If you're interested in seeing what other investors are paying for properties in the Houston area, please reach out.
Investor · Melbourne, Victoria · Member since 2015 · 203 posts · 58 votes
7y
@Tyler Crowell Welcome to BP Tyler! I also was in a similar position some years ago, with developments we were doing here in Australia getting too expensive and margins too tight, so looked at US midwest property investment back some 5 years now. Definitely made an amazing difference to us!
Houston, TX · Member since 2018 · 5 posts · 2 votes
7y
Wow!! Thank you for all the information! I am so glad to have joined biggerpockets!
In regards to the 20% (approximately) downpayment, i have heard on the BP podcasts and afew other places that some lenders will accept a 5% - 10% downpayment. Have any of you had any experience with this ?
Another question is, i have also heard on the BP podcast and Grand Cardone podcasts, that some have even gone as far as to use an FHA Loan for the property, even though they arent living in it.
People on the BP do mention putting 5-10% down on properties. Saying that does not necessarily refer to lender requirements and may just refer to the down payment.
For example, properties that my team sells usually require a $5,000 down payment regardless of the purchase price. If the purchase price is $100,000 then yes, the buyer paid a 5% down payment. To take that further, closing costs may include lender fees, HOA fees, title fees, etc. that cost another $5,000. This means the buyer may have put $10,000 cash down (down payment + closing costs) for a property that cost him/her $110,000 total (around 9%).
Grant Cardone must have lied about occupying his first property to get FHA financing...something I don't think anyone (except maybe Grant) would recommend. The home must be the borrower's primary residence to qualify for an FHA loan.