Can't get Financing Yet....

10 Replies

I am super excited to hop onto the House Hacking train and reach financial freedom before I am 30! I recently became a real estate agent and represent a fantastic builder in Flagstaff, AZ but I cannot get financing yet because of my job switch. I need a few years of income first and I will take the time to pay off some debt too. Since I cannot jump right into buying a small multifamily property, what investments or moves toward financial freedom can I make in the meantime? ANY and ALL ideas are much appreciated! Thank you!

You could find a syndication deal to invest in, with a 2 year target hold. You'd get your money back around the time you're looking to buy. 

Does your builder allow you to take on clients? For experience, you could start helping investors locate properties. Sit down with them and understand their buying criteria, and start analyzing deals. 

Originally posted by @Christian Petris :

I am super excited to hop onto the House Hacking train and reach financial freedom before I am 30! I recently became a real estate agent and represent a fantastic builder in Flagstaff, AZ but I cannot get financing yet because of my job switch. I need a few years of income first and I will take the time to pay off some debt too. Since I cannot jump right into buying a small multifamily property, what investments or moves toward financial freedom can I make in the meantime? ANY and ALL ideas are much appreciated! Thank you!

 Look for owner financing opportunities. 

I would live as cheaply as possible and become debt free. It is hard to have financial freedom when your income is going to debts. If you have extra money beef up your reserves to go towards a down payment and renovations.

Thanks so much everyone for the suggestions! Sam Grooms, I honestly don't know what a syndication deal is so I will definitely research that, and yes I'm thankful to be able to do re-sale on the side, thanks for the suggestions. Jay Helms, great idea, so far I have only seen a few, but there are some out there! Amy Beth, I definitely agree with you and plan to pay off debts ASAP, hopefully I make good money this year and do it quickly. 

@Christian Petris Congratulations on setting up your long-term goals! Now it's time to set up the short term ones as to how can you get to the house-hacking point. So you're asking all the right questions in this forum. I suggest helping other investors find deals and potentially offer to partner up on these deals  by bringing value as either a deal finder or property manager or both? Also, become well-versed in the investors' needs and be the go to realtor for other investors. This will allow to exponentially grow your network/wealth. 

If you'd like more ideas, feel free to PM me directly.

Best!

@Christian Petris You have 2 options: 

  1. Invest in owner-occupied or lower-cost properties; OR
  2. Pay off your debts

What option you take depends on your personality and goals. 

For instance, I would pay off credit card debt, avg. interest rates are above 15%, first starting with the highest interest rate credit card. Very few, if any, real estate investments are sure to return 15%+ year in and year out. But if you have car loan at 2.29% (the rate we have), you should stretch that payment out as far as possible. Even an index of public REITs provide you better income returns than 2.29%

As you can see, what choice you take depends on a number of factors as it is not a simple yes/no decision. I would also like to add that you should try to refine your goals and objectives. That will allow you to filter out information that does not fit with where you're going. The world of RE is so big that trying to learn everything means guaranteed failure. 

For e.g., we have real estate investments but as we prefer our mobility, both the wife and I, prefer to rent (we move every few years). Hence, we have focused our real estate investments in a combination of REITs, physical commercial real estate and syndications. Our friends' who have stayed in the same city since college have chosen to buy SFRs. They have done very well for themselves as well. 

Ultimately, what strategy you choose should be in sync with your personality and goals. 

@Alina : thanks so much for the comment, great strategy! It does make me nervous, but I need to step out of my comfort zone. I really appreciate the comment. 

@Alice: Hi Alice! I totally get your point, and thanks for commenting. Luckily I work for a brokerage that represents the builder and I am able to do re-sale as well. The builder I represent is great, so I've got some good money potential. 

@Omar: Omar, thanks for your thought out response, I really appreciate it. Everything you mentioned definitely makes sense and my husband and I really do need to sit down and refine our specific goals. Great point with the car debt, we kept going back and forth on if we should pay it off right away or not. I definitely need to pay off the student loan debt, luckily I don't have too much or credit cards. At this point for financing its pretty much just not having two years of job experience on my end. I never thought of location/mobility as a factor really, so knowing we don't want to leave Flagstaff (all our family is here) this helps me to decide what type of investments we want to go after. Again, I really appreciate your comment, thank you!

Originally posted by @Christian Petris :

I am super excited to hop onto the House Hacking train and reach financial freedom before I am 30! I recently became a real estate agent and represent a fantastic builder in Flagstaff, AZ but I cannot get financing yet because of my job switch. I need a few years of income first and I will take the time to pay off some debt too. Since I cannot jump right into buying a small multifamily property, what investments or moves toward financial freedom can I make in the meantime? ANY and ALL ideas are much appreciated! Thank you!

 Another option that is looked over consistently are F.I.A.'s (fixed indexed annuities)

These annuities are guaranteed income and based on the rule of 72 you should double your money every 8 to 12 years depending on the market. The great thing about F.I.A’s is that your money isn't actually invested in the stock market and when a crash occurs you flat line at 0 not negative 20% or whatever the loss was that year. Your gains are capped at let’s say 12% or whatever the carrier you use dictates.

At least 20% of your long-term assets should be tied up in Annuities in my opinion. I love RE, but you need to be diversified especially when you're young!

@Shaun Weekes

Hi Shaun, thanks so much for the advise. This is really interesting to me, and I have honestly never heard of F.I.A.'s I am definitely going to research and learn about this. I still have so much to learn about finances and ways to invest. Thank you for the idea, I am excited to look into this.