Starting off with little to no money?

Question

Hello all,I was hoping what’s the best way or options I may have to buy a property for rental use purpose? Also with using little money down with not a big monthly payment? Anything advise helps.

Thanks!

Caleb Brown · Answer

I would not advise buying a property with little or no money. Focus on saving up and doing a house hack. Too much can go wrong with not having enough capital. If you had an interest in real estate you could focus on the sales side. It would give you experience and knowledge along with making $$

Gabe R. Gonzalez · Answer

@Enrique Mendez Hop on google and look up "First Time Homebuyer, Illinois resources" There are $10K downpayment loans and grants available to first time home buyers. Get pre-qualified with a mortgage lender - I have a recommendation if you'd like. Once you have that pre-qualification, you can start looking. I'd recommend owner occupied 2-3 flat for your first one. When you start looking you will likely need that qualification letter to get you into the showing, some agents don't want just anyone walking through their occupied listings. Good luck and let me know if you need any help.

Wale Lawal · Answer

@Enrique Mendez

To reduce mortgage payments, consider FHA, VA, USDA, house hacking, conventional loans, seller financing, lease options, partnerships, down payment assistance programs, creative financing, and DSCR loans. To enter the rental property market with minimal upfront costs, research local markets, consider future growth, and plan for vacancies.

Good luck!

Vivienne Affat · Answer

Buying a property for rental use with minimal down payment and manageable monthly payments is a common goal. There are some lenders who offer up to 100% financing. If you need some help, shoot me a message. Goodluck!

Gabe R. Gonzalez · Answer

You could do FHA owner occupied for a two flat.

The FHA is more specific in what they want the property to look like and its condition, but it’s typically easiest to qualify for as a first time buyer.

Winsome Lewis · Answer

Hey @Enrique Mendez - I am new to the real estate game as well (still in the personal finance organization stage), but I have read Real Estate Rookie and it provided some great nuggets of wisdom to get started. I'll link it here.

Paul De Luca · Answer

House hacking is buying a 2 to 4 unit multi-family property, living in one unit, and renting out the others. Oftentimes investors live in the property for a year and then buy another one to repeat the process.

Gregory Schwartz · Answer

House hack a 3-4 bedroom single family home. Rent out the spare bedrooms. Townhomes usually offer a good entry price point. Worked well for my client, a college student.

Theresa Harris · Answer

I agree with Caleb-save money for a down payment and to have money for repairs and maintenance.  One question is why do you have little to no money for a down payment?  There are lots of reasons: you are young and just starting out, your job doesn't pay a lot and while you save what you can, your job doesn't pay a lot or you have a good paying job, but spend most of what you make and don't save any.  I'd suggest you sit down and go through your monthly expenses and see where you are spending your money and if anything can be cut.  If your job doesn't pay a lot and all of that goes to rent, gas and groceries, it might not be possible.

How much you will be qualified to borrow depends on how much you earn, so if your job pays less, you will be able to borrow less.  Look into getting a second job and use all of that money to save for a down payment.

House hacking is a term some people here use to refer to getting a roommate in your own home.  You can rent out a room or two and earn extra income from the rent.

Paul De Luca · Answer

It depends on how much cash you have and your budget, but house hacking is definitely going to be your best option. If you have relatively little cash, it's tough to beat putting 5% down or less. It may be worth connecting with a lender to see your options. If you need recommendations, let me know.

Starting off with little to no money?

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