I am decently new to the idea of real estate investing. I have been studying, reading and learning as much as I can over the past year and feel confident that I would be successful if I could get the ball rolling. I live in Northern Utah where the housing market is quite expensive even when it comes to distressed properties. I'm currently saving up for a down payment to possibly flip a house or two and then use the profits from the flips to purchase a small multifamily property to house hack. Although it is taking a longer amount of time than I would care for to reach the amount of money I would feel comfortable with having prior to me searching for and making a deal. I'm here to ask the people with more experience than I on how to begin this process in the most efficient way possible. I have never purchased a house and only have the knowledge I have attained over the past year with BP books, Robert Kiyosaki books, BP webinars and personal mentors who are investors themselves although they invest out of state.
I appreciate all replies and look forward to hearing from those who may respond to this post.
What kind of $$ do you have right now and what’s the first purchase goal number?
Your salary is consummate with your housing prices. If your market is expensive, it stands to reason your salary is also higher than normal. Most of the countries housing trades in the 3-5 times income range, with only 5 to 10 cities trading at higher rates than that.
Currently I have approximately 5k and still saving. Would I want to take advantage of first time buyer rates when it comes to the down payment or should I make a bigger down payment to have a smaller mortgage? I’m open to most price ranges although I have been looking at 150k-250k cause I’m having a difficult time finding cheaper at the moment.
Since you are starting this investment journey the name of the game is to keep your DTI as low as possible.
You’re going to want to put down the least amount as possible right now to keep cash on hand for future projects.
Don’t forget if you’re shopping multi family in your price range you can use the rent for one of the rental units to help you qualify, typically 75% of what the lease states.
So would you recommend going straight into the multi family and start house hacking with a duplex or a triplex without the initial flips to get some income? Also if I don’t Make as big of a down payment on a duplex that would hinder the opportunity for cash flow wouldn’t it?
Depends on your flip, construction experience. If that’s limited then your safest bet now is to buy a duplex or triplex that is in disrepair that you can put sweat equity into.
I can’t speak for your skill set or risk tolerance but if you’re just starting out with investing and have limited flip experienced you’re safer bet is to go multi family.
@Zayne Ruth I think you should 1st check your own risk profile, as how much risk that you can take financially? BP has calculator for you to justify the purchase of your investment. Make good use of the tools available and try not to re-invent the wheels.