Buying my first property

12 Replies

I want to buy a Multi Family home or town house and live in one unit. I want to rent out the other one or how ever many units that may be available. This will be my first investment. But I'm in the process of trying to finish barber school and I have no income to pay for it. I know there is a loan that could help me get started. what is some good advice about what I should do first, and the steps that I can take to ensure that I make a good investment?

There are a few loans that allow little to no down payment such as FHA / USDA / VA loans. I would just start out by listening to all the BP podcasts and taking notes on everything that you find important. There are a few that cover creative financing and using little to no money of your own. Learn about what makes a good deal and the rules you need to follow such as the 2% 50% and 70% rule for starters. I guarantee just listening to the podcasts will answer 99% of your questions.

I would attempt to find at least a part time job to have a vitamin of cushion. And since your income will be very low, you should be looking for a deep discount to get as much cash flow as possible. Possibly look up the BRRRR strategy. If you can get a decent LOC or loan you can rehab and refinance.

@Christopher Shelby Even with an FHA loan, is it really likely to get improved with no income? I realize the down payment is normally incredibly low (3.5%), but do you know about the rest of the approval process? I ask because I have never used an FHA loan and I don't know if I could get improved. I'm a law student but my fiancé has a fairly lucrative career, but since we aren't married yet, would I be able to get approved without income?

I couldn't tell you. I'm just spitting out some of the basic knowledge I've learned from the podcasts. I'm sure someone around here would be able to help more. 

@Gregory Johnson star calling banks and see what your options are and what you need to qualify. You can start with your local bank to get an idea.

@Lauren Stamey lenders typically have two DTI (debt to income) ratios they look at, front end and back end. The front end DTI is just your income compared to the debt service of the loan you are applying for. Lenders I've talked to like 31% or less front end DTI. So if you're a student and you're gross income is say $1,000 per month, they will approve a mortgage payment of $310 per month. The back end DTI is your income compared to all debts you service. This would include the mortgage you are applying for as well as any car loan payments, student loan payments, credit cards, etc. Lenders I've talked to generally want 45% or less back end DTI to approve a loan. Hope that helps.

Also @Lauren Stamey your fiancé could qualify for the property and buy it without you. Once you are married you'll own the property together.

Thanks for all the help I really appreciate it. I will carefully look into every thing you all told me.

Originally posted by @Christopher Shelby :

There are a few loans that allow little to no down payment such as FHA / USDA / VA loans. I would just start out by listening to all the BP podcasts and taking notes on everything that you find important. There are a few that cover creative financing and using little to no money of your own. Learn about what makes a good deal and the rules you need to follow such as the 2% 50% and 70% rule for starters. I guarantee just listening to the podcasts will answer 99% of your questions.

Hi. What is the 2% and 50%? I know the 70% one. Thanks in advance

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