No Money Down: How to but my first rental property

9 Replies

I am in the Harrisburg, PA area and I want to buy my first property with no money down.  My goal is to purchase something by 9/1/19.

I have no Real Estate Background but, I just Read the Rich Dad, Poor Dad.

I own my own transport business now.  I want to buy 10 properties in 5 yrs.

I am all ears so please give me your best advice.

Hey Gary, Awesome stuff man! Good for you.

I would reach out to a local lender and see if you qualify for a low or no money down FHA loan and house hack. Start there and then find a deal!

The FHA loan is probably your best option. You can buy a 1-4 family and either rent rooms in the single family or the other units in a 2-4 family. It's not "no money down" but it's certainly low money down. It's 3.5% of purchase price so on a $100k house it would be $3500, plus closing costs, but you can probably wrap those into your mortgage.

I love the FHA house hack on multi family at 3.5% down. Like what was said, it isn't "zero" down, but low down. It doesn't have to "cash flow", per se. The other units could pay most of your mortgage (PITI) and you could still be way ahead on what you currently pay for housing. You can ask seller for contributions toward closing costs, ask for a home owners warranty for 12 months so you can sock away capex reserves. Now, it may be tough in today's market to get those concessions from a seller, but it's always worth the try. You just need to make sure the property appraises. I once bought a duplex and bid higher than asking to get the HVAC replaced in both sides. Seller replaced all HVAC prior to closing. I essentially rolled in that cost into my mortgage. Be creative!

Gary, 

I bought a 3-unit in Harrisburg two years ago. The 2 tenants are both long-term, and my wife and I live in the 3rd unit. It's great so far. Their rents pay off our mortgage and cover the utilities, so my wife and I basically live for free. 

My advice to you: Listen to as many bigger pockets podcasts as you can, stay away from REALLY rough neighborhoods, and don't over pay!

Good Luck!

-Joe

I'll second what @Joe Chirdon said and would highly recommend you try a house hacking method via an FHA (3.5% down and up to 4 units). It's going to be difficult to pull off a no money down with no experience/track record and lack of education. Start by educating yourself on various real estate topics specially no/low money down methods (there is a BiggerPockets book on this topic) and start honing in on one specific strategy. Asking the public a vague questions with limited experience is going to get you a bunch of answers that will overwhelm you or not apply to you. Start with educating yourself so you can ask more specific 'how to' questions. Good luck in your journey!