How Much Money Do You Need to Buy Your First Property?

Question

Do you need a lot of money to get started in real estate? I'm considering house hacking for my first property in the Chicagoland area, but I'm not sure how much capital is typically needed. Any advice or insights?

Aaron Zimmerman · Answer

@Angel Arroyo - welcome! For a house hack (which is the most accessible way to get into an expensive market such as Chicago), you can get in for 3-5% plus closing costs. There's way to get some closing credits and time your purchase so you're getting monies for the rents.

I would encourage you to get involved in some local meetups and network with some lenders. I'm happy to provide you some lenders id recommend.

Eudith Vacio · Answer

Hey Angel 👋🏽

Welcome to BiggerPockets, sounds like you're on the right path to getting your feet wet into real estate. If you want something here in the Chicagoland area, you're looking at $15,000 minimum but keep in mind that lenders might want to see more in your bank account to make sure you have enough reserves. Realistically, you can easily purchase a building with less than $20,000 if you go in with the proper strategy and can negotiate some closing credits + find a bank that provides some funds for you, too. I have a bank that offers 3% of closing costs + $5,000 so it's definitely do-able!

Aside from that, you have to make sure you get pre-approved for an amount that will enable you to qualify for the building, but that's the easy part!

Erik Raz · Answer

House hacking is one of the more affordable ways. If you get FHA loan very low down payment. Regular mortgage is around 20-25 percent down payment. Plus some extra costs to fix property if needs fixing and other minor costs.

For rental (non house hacking) it gets a bit more diverse. It depends on how much work you want to do and this really gets creative. For example some people buy a really beat up property and start to do some of the work themselves (whatever they can do like painting, install doors etc..). It is a bit tough but does save massive costs. There are many other ways ways, for example you can find a homeowner who wants to sell and do a seller financing option with no money down. There are so many ways it really depends on how much effort you want to put in

Doug P. · Answer

I've bought houses with $1 deposit. Obviously to get that you have to buy off-market with no agents or lenders involved.

Jeff Roth · Answer

Hi Angel from Chicago, Il-

Great question! You are looking to get started in real estate in the Chicagoland area and are considering house hacking and renting out rooms to help make the payment.

You asked how much money is needed to buy your first property.

Certainly buying the property as a primary residence will keep the downpayment and interest rate low but also look to get seller credits toward closing costs to help with those expenses as well.

Try to have some reserve for unexpected expenses or repairs.

To Your Success!

Paul De Luca · Answer

@Angel Arroyo

Check out my recent forum post about three recent Chicago house hack case studies. It's doable with $15k-$20k.

Alexis Sostre · Answer

Starting your real estate journey through house hacking in the Chicagoland area is a smart strategy, especially for first-time buyers. The amount of capital required can vary based on the property type, financing options, and your personal financial situation.

John Morgan · Answer

@Angel Arroyo

I started with only 25k ten years ago. Since then, I’ve scaled up to 29 SFR by using OPM. I paid my original 25k to myself back a while ago so it’s all infinite cash flow from here on out. But I would recommend saving up at least 25k or figure out a way to get it. Good luck!

How Much Money Do You Need to Buy Your First Property?

How Much Money Do You Need to Buy Your First Property?

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