I am new to this whole real estate thing. My goal is to reach financial freedom through passive income by 45. I am currently 20. I have about 6500 total debt(student loans and private loan) excluding my car (20k). My annual salary is 39k and my DTI ratio is low 30's. I have absolutely nothing saved up. Just recently started a roth ira and 401k. I plan on paying off the 6500 by the end of the year while trying to save each month. I guess my question is, is my car payment going to affect me getting a loan? Maybe my age makes me higher risk? My credit score is 780-800. What type of loan would be most beneficial? I have been looking at MFHs and duplexes. I also plan on house hacking.
@Arlet Rodriguez Hi Arlet,
If you haven't already done so, I would first suggest that you define exactly what your goals are in real estate. Where do you want to be 3 to 5 years down the line. For example, if you say that you want to own 15 properties in 5 years then work backwards and figure out how you can realistically get there and that should help you if you set a really unrealistic goal.
In regards to your questions, your car may not hurt you but it definitely will not help you get a loan. Are you able to trade it in and get an older model with no monthly payment, This is something to consider.
I have never heard of someones age hurting them in real estate in regards to obtaining a loan.
I highly recommend house hacking and you have a great credit score so you could utilize a FHA loan (low down payment) on a duplex or a single family home and rent out the additional rooms.
You need to do ample research before embarking on this however. I believe Bigger Pockets has multiple books for investors that are just starting out. Reading RE books and continuing to post questions and give feedback when possible on the forums is the best way to move forward.
Your debt to income is where lenders want it. I would suggest house hacking. You'll have to have some money saved up for an FHA loan but its 3.5% down plus closing costs. I would go for a fourplex for sure!
I am in my research & save phase, I want to save for the next 2.5 years and then start putting my plans in action.