Multi Fam - No Discretion Advised .... give it to me straight !!!
Hello Bigger Pockets Members,
Brand new and getting Straight to the point.
I’d like some advice on what I should do.
I’d love to get super detailed and give you guys my life story but honestly I don’t think that matters, until we maybe meet and grab a coffee or a donut, tea or a taco, if it goes that far, which I’m hoping it does. ☕️🍩🍵🌮.
So it here I am In a nutshell
-25 year old - 40,000 clean after taxes ( single )
-Live at home rent free
-Payed off all credit cards
-Payed off car loan
-Currently only have about 5,000 in the bank ( just started going positive after paying off debt )
-Saving all earnings every month ( 3,000 after taxes, a month low balling a bit )
-Work 12 hours - 6 days a week ( 😐 )
-Credit is at 690- 700 last time I checked ( 1 month ago )
-First time buyer
-Interested in multi family investing minimum 2 units + . ( cash flow ) don’t plan on living in it. I wouldn’t mind though.
-Maybe a potential BRRRR with a 203k loan if the opportunity arises ( tried really hard not to scoff as I wrote that one.)
-I live in Los Angeles
As high as the market is, I’m looking to invest In Los Angeles people already mentioned Lancaster and Palmdale but idk, you real estate agents, investors and money loaners out there, is that really my only option? I have considered out of state but my confidence(knowledge) simply isn’t there YET to go into something like that responsibly. And I just refuse to believe there isn’t opportunity in LA.
I did talk to a couple Money lenders already and unfortunately they weren’t too comfortable working with investors, Or maybe just with me 🤔 ...
The search continues 🔭🔬🔦.
I know it's just the fact that I'm still not able to recognize good deals that I haven't had any luck in finding a good one yet. I know it may be due to my lack of knowledge and not because there isn't any. I was able to come in contact with a couple of real estate agents and one agent gave me a list of multi families on the MLS. All the properties are in the 380,000 - 500,000 range. I've ran a couple properties on the calculators offered here and everything seems to be estimating negative on the cash flow, 2 to 3 hundred dollars still coming out of my pocket after all expenses and P&I . Being that most of these properties are rent controlled, i don't know how much I can play with the numbers even if I did add more value to the house by forced appreciation.
I'm calculating it with a 3.5 FHA loan since I don't currently have the money for a conventional 20-25 percent down payment. I'm aware thats most likely the biggest reason why I'm not seeing any positive cash flow in some of these properties, but like said I'm just being realistic and blunt with my situation, currently. I know these calculations are just estimates and in real life the numbers could be little better or a little worse, and by, "a little", I mean maybe a lot worse 🤫.
Most of the properties are 2 units typically one being a 2 bedroom 1 bathroom
And the other unit being 1 bedroom 1 bathroom. 399-500 thousand.
There was one that was a 3 bedroom 1 bathroom and the other unit being 1 bed room and 1 bathroom. With potential to add an extra room ( supposedly ) ( south central area ) listed at 400,000
My question is should I just be patient and keep saving until I have about 30-35,000 for a decent down payment and extra leg room for potential repairs? And study more and get enough knowledge on the craft to finally be able to recognize a deal and then start on this journey?
Or are there some things I’m not seeing where I can actually do it now? With the right strategy of course.
The only reason why I’d like to buy now is because I’d like to take advantage of the excess overtime my job offers, to just get my foot in the door, and begin in what I KNOW will be the beginning of the rest of my life ( real estate, not my current job ). Because in all honesty I’m just about ready to get out of this job since I only got the job to get out of debt, now that I have, I realized that maybe if I hold on a little longer I can use it to my advantage and use it to start investing. I was able to clear 35,000 in debt roughly in less than a year with this job . The monthly payments I did to achieve that is what ultimately made me see that maybe I could do this. I know many of you will read and point out the obvious, that I still have a lot to learn. Or to get a better job that pays more. But I am patient enough to wait it out and learn more and save more and then jump on this. But I also can’t ignore the fact as much I have many things against me there’s also a couple factors on my side where maybe, just maybe I could jump on a deal sooner than it seems. So there it is in a semi nut shell ( got more detailed than I originally planned 😅).
Thanks in advance for Any advice, opinions, and comments. And keep on rockin it ✌️