Taking out student loans to acquire property

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Taking out student loans to acquire property

Daniel Chih
Wholesaler · Miami FL · Member since 2020 · 16 posts · 6 votes

Hello all Biggerpockets investors, I have been educating myself in real estate investment and would love to start putting in some actions. I'm finishing up my bachelor's in accounting and going for an one-year master degree starting in August this year. I'm in Miami FL right now but will be moving to Columbus Ohio in August for graduate school. I thought why not to buy a property in Columbus to do house hack instead of renting an apartment from someone else. One thing that concerns me the most about this is that I don't have a whole lot of capital right now but I still can take out student loans to fund my first deal. I would love to get y'alls input on this. Is it a good idea to take out student loans to fund my first house hack?

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Account Closed
Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes
5y

@Daniel Chih

Better to be patient and do it correctly and be an investor for a long time, than to be impatient and have your first deal be a killer that ends your journey before it really gets momentum.

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  • Zeke ListonBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Daniel Chih:

    Hello all Biggerpockets investors, I have been educating myself in real estate investment and would love to start putting in some actions. I'm finishing up my bachelor's in accounting and going for an one-year master degree starting in August this year. I'm in Miami FL right now but will be moving to Columbus Ohio in August for graduate school. I thought why not to buy a property in Columbus to do house hack instead of renting an apartment from someone else. One thing that concerns me the most about this is that I don't have a whole lot of capital right now but I still can take out student loans to fund my first deal. I would love to get y'alls input on this. Is it a good idea to take out student loans to fund my first house hack?

     That would be great if you could house-hack while attending school. A couple of things that the bank will look at would be your FICO score, income, and debt-to-income ratio. If you're going to be living in one unit, you can get an owner-occupant loan at 3.5% down. 

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  • Dan BeaulieuPro Member
    Lender · Knoxville, Tennessee (TN) · Member since 2016 · 422 posts · 667 votes
    5y

    @Daniel Chih

    No man. Just, no.

    1Reply
  • Joanna Gray
    Rental Property Investor · Member since 2021 · 5 posts · 1 vote
    5y

    @Daniel Chih

    Hello. I would recommend you paying yourself with a cashier's check. Student loans allow you to pay for housing so you should be fine. I would also recommend you spend a couple of hundred of dollars to consult with a real estate lawyer before your purchase.

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  • Sandra Morrison
    Investor · Cincinnati/Fort Thomas, KY · Member since 2015 · 206 posts · 183 votes
    5y

    @Daniel Chih join the local chapter of the real estate investors group, COREE. All online so you can start while in Florida. There are weekly calls for property swaps and deals/funding. Some very creative deals are going on and even if you don’t do one it is great knowledge on finding people that know how to structure a deal not using banks and big cash down payments.

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  • Daniel Chih
    OP
    Wholesaler · Miami FL · Member since 2020 · 16 posts · 6 votes
    5y

    @Anish Tolia Student loans allow you to spend the money on housing. However, I do agree with your thoughts on high risk with no reserve. I think I do need to wait until I have a more steady income stream to start investing. Thanks a lot for your thoughts.

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  • Daniel Chih
    OP
    Wholesaler · Miami FL · Member since 2020 · 16 posts · 6 votes
    5y

    @Chris Pasternak I for sure have been watching too many YouTube videos and podcasts and all that on RE investing. I know I’ve accomplished a lot as a student but I want more! I think you’re right though. I do need to focus on getting through school for now and get my steam of income first. Then think of investing later on. Patience! Thank you for your comment!

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  • Daniel Chih
    OP
    Wholesaler · Miami FL · Member since 2020 · 16 posts · 6 votes
    5y

    @Syed Zafar Yes I need to probably be creative in getting some experience of managing during school but it sounds like it’s not likely I’ll be able to get approved for the loan and that’s fine. I know man! The itch of getting started is real but I need to wait out for now. Thanks for your comment and I’d love to get connected with you!

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  • Daniel Chih
    OP
    Wholesaler · Miami FL · Member since 2020 · 16 posts · 6 votes
    5y

    @Sandra Morrison Thanks for letting me know! I’ll check that out!

    0Reply
  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    5y

    Taking out a Federal loan for purposes other than for which it is intended is dicey territory legal-wise.

    It's a graduate loan so student loan forgiveness doesn't apply.

    I'm not sure I'd be comfortable with this.  You're talking about nondischargeable debt potentially obtained under false pretenses from the Federal government.

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