I would first read 'The Book on Rental Property Investing' by @Brandon Turner. It's an awesome book that will help you develop a solid game plan, understand your financing options, and help you figure out where you want to start at first.
You have so many options ahead of you and the places you can go! You've got a great starting savings, and low debt, which is fantastic. I started with 42,500 in credit card debt, and 2,000 in my savings. Thankfully I have a great Engineering job and was able to spend 2 years paying off my credit card debt. In the meantime I read a lot of books like the one I listed above, got my Real Estate License, and got to work!
I'm not sure what housing prices are like where you're at, I'm assuming not cheap, but I would definitely look into House Hacking first and foremost. You'll be able to free up a large chunk of money each month by not having to pay a mortgage/ rent, and if you play your cards right, you can even possibly have some cash flow on top of that. You can still use an FHA for anything up to a 4-plex, you just have to live there for 1+ years, and after that year you can refinance to a conventional (Fannie Mae backed loan) and use your FHA again! I just learned about that, you can use your FHA loan opportunity more than once, look into the specifics for sure, but I believe you have 3 years to use it repeatedly, as long as you are only using one FHA loan at a time, and it's your primary residence.
If you do your analyzation correctly, then when you refinance your home each time, you are able to get any equity built up by your tenants, your original down payment (if you can increase the value of the home with some face lift work), and your cash flow generated from the property to use as a downpayment for your next one, and you can do that over and over again.
I wish you luck man! Keep us updated on your journey! We need all the success stories we can get on here, I look forward to reading yours! Don't stop asking questions. Ask, and ask, and ask, and ask. And when you're so tired of asking questions your brain hurts, ask some more lol.
@Michael Carbonare hey there! my goals would be house hacking using a fha or 203k something like that or get a investment property in a llc if I can find a lender willing to do so where the $10000 is my 20 percent down.
I would first read 'The Book on Rental Property Investing' by @Brandon Turner. It's an awesome book that will help you develop a solid game plan, understand your financing options, and help you figure out where you want to start at first.
You have so many options ahead of you and the places you can go! You've got a great starting savings, and low debt, which is fantastic. I started with 42,500 in credit card debt, and 2,000 in my savings. Thankfully I have a great Engineering job and was able to spend 2 years paying off my credit card debt. In the meantime I read a lot of books like the one I listed above, got my Real Estate License, and got to work!
I'm not sure what housing prices are like where you're at, I'm assuming not cheap, but I would definitely look into House Hacking first and foremost. You'll be able to free up a large chunk of money each month by not having to pay a mortgage/ rent, and if you play your cards right, you can even possibly have some cash flow on top of that. You can still use an FHA for anything up to a 4-plex, you just have to live there for 1+ years, and after that year you can refinance to a conventional (Fannie Mae backed loan) and use your FHA again! I just learned about that, you can use your FHA loan opportunity more than once, look into the specifics for sure, but I believe you have 3 years to use it repeatedly, as long as you are only using one FHA loan at a time, and it's your primary residence.
If you do your analyzation correctly, then when you refinance your home each time, you are able to get any equity built up by your tenants, your original down payment (if you can increase the value of the home with some face lift work), and your cash flow generated from the property to use as a downpayment for your next one, and you can do that over and over again.
I wish you luck man! Keep us updated on your journey! We need all the success stories we can get on here, I look forward to reading yours! Don't stop asking questions. Ask, and ask, and ask, and ask. And when you're so tired of asking questions your brain hurts, ask some more lol.
I would save more and keep educating myself. Get rid of that credit card debt too.
When you find a opportunity and have a solid strategy in place, pull the trigger. You will also be well capitalized.
I have to agree with Aaron. The more you educate yourself, the clearer you will know the direction you want to go in your RE journey. There are dozens of options as a potential investor we can make, but being well capitalized and well educated will make your leap in much easier.
@Shane Short oh yeah I forgot to mention I鈥檓 studying to become a RE sales agent in ny that鈥檚 where I live, you better believe housing prices are super high and we currently rent already payed for this apartment long time ago in my opinion!
Seen this great deal for a 5bed 3bath in Chester PA 1 block from Windener University on Craigslist for $32000 cash needs some upgrades the previous owner started some of the work I like it as my first project could potentially get 2500-3500 each month maybe more with the upgrades. Heres the descrition
$32000 / 5br - 2500ft2 - 馃帗 WIDENER UNIVERSITY MULTI-FAMILY TRIPLEX - SELLER VERY MOTIVATED 馃帗 (Chester, PA)
HERE'S THE DEAL:
Hot Multi-Family Triplex
1 block from Widener University campus
Just minutes from Harrah's Casino & Crozer Keystone Hospital
Tons of cashflow potential
Off-street, lot parking available for tenants
Plumbing and electric has been recently updated throughout the property
1st and 3rd floor need cosmetics only, 2nd floor is down to the studs
The 3 units are metered separately
Property is vacant
Corner property
Seller is VERY Motivated
Serious CASH BUYERS Only
This is an assignment of contract
Call or Text show contact info for more information
I would save more and keep educating myself. Get rid of that credit card debt too.
When you find a opportunity and have a solid strategy in place, pull the trigger. You will also be well capitalized.
Akeem, what are housing prices in your area? sounds like 10K would be on low end for down payment, even for FHA. If you buy investment with traditional financing, your looking at a down payment of 25-35%. Your best bet is to start of the house hack route I believe. I also agree, keep saving and paying off that debt.
@Akeem Moreno that鈥檚 awesome man! You鈥檒l get your license in no time.
In regards to that property, I took a look at the ad on Craigslist. It could definitely be a good investment, but it would require A LOT of work. I鈥檓 betting 50,000 worth at least. Not to say it鈥檚 not doable though, but a bank wouldn鈥檛 lend you money for it. You鈥檇 have to get a hard money loan which will require 20% down. So let鈥檚 just say 50k in repairs plus 32k for the house equals 82k. So you鈥檙e looking at 16,400 down to your hard money lender, plus a lot of hard money lenders from my experience don鈥檛 lend on owner occupied properties.
If you can close on it you're looking at about 3-4 months of repairs probably. Keep in mind you'll still have to pay your PITI while it's been repaired with no cash flow from it. Once it's repaired, you can refinance it, possibly on an FHA, which should get you your down payment back plus a substantial amount. I don't know housing prices in that area, but I'm assuming after it's fully fixed up it'll be worth at least 150,000.
Before doing anything with it, I would get 3 estimates from separate contractors, a thorough inspection, and verify that the electrical and plumbing work was done professionally, and that there aren't any major fixes. Once you have that info, you can go to a hard money lender or a bank for a construction loan with a game plan, and actual figures. Make sure you get an ARV for them too.
All said and done you can take the money from the refinance and do the exact same thing again! It would be a big project for a first time, but it鈥檚 not to say it couldn鈥檛 be done! Just keep in mind things like rot, mold, bad foundation, etc. could pop up and substantially increase the repairs.
If you do decide to take it on please keep me updated, I鈥檇 love to see how it goes and know the actual figures involved.
@Shane Short sounds like a solid game plan I will consider your strategy along with all the other great information I鈥檝e received from all the other members on here!
Good job you need a property as an offset, if you can not afford your immediate area look outside to where it is affordable, Rent where you live and buy where you rent, even if you bought it as a rental.
Paying rent without any offset long term will just erode away your earnings.
1st time home buyers can do an FHA or Fannie mae, look for down payment assistance
@Akeem Moreno Hey man, one more update. I was able to confirm that Hard Money Lenders won't lend on owner occupied properties for the most part. There is too much risk involved since that's one less unit that is cash flowing. The property has to be strictly business use or there is too much red tape, and there are penalties (like foreclosure) if you try to be sneaky with it. With that being said though, you could still get a hard money lender for the repair portion at like 10-12% interest, then once the repairs are done, refinance into an FHA, THEN you can live on the property no problem. You'd actually be required to with an FHA lol.