Looking to purchase a single family home in a city. I dont think i can get approved for more than a $140,000 loan, putting 3.5% down with an FHA loan. I want to live there a few years while i fix it up, and save up for another property. Looking for any tips advice for a beginner, please.
@Marty Angelina I would start out by calling a few lenders to explain what you are trying to do and discover your options and find out exactly what you'll qualify for. This will help you know how much you can expect to spend. With a traditional FHA the property has to pass some specific qualifications so the property has to generally be in good shape for you to close - so there may not be a whole lot of room for improving the property for increasing its value while you live in there (although doing some updates on already functional items may increase the home's value some). You can also look into a 203k loan which is a type of FHA loan which includes a rehab loan in the mortgage. Since you are looking for a SFH and planning to live there you may have some other options as well that I do not know about so I'd again talk to a few lenders. Best of luck to you getting started!
@Charles Baldi thanks so much for the advice! Yeah I wasn't looking for a complete fixer upper my first time around, just planning to upgrade things here and there. Maybe even look into finishing an unfinished basement (extremely common in the area i'm looking).
@Marty Angelina Sounds good, nothing wrong with that. Think about your long term plan for the property to make sure what you buy makes sense. For instance if you plan to rent it after you fix it up make sure you run numbers on it before you purchase to make sure you know it will work as a rental once you move out. Run the numbers including a property manager if you do not plan to do that yourself. Or if you plan to sell after a few years do enough research to make sure the improvements you make will increase value enough to give a profit once you move out (taking into account as a seller you'll have to pay commissions, etc). Or maybe you just want to increase the value enough so you can take out a HELOC to use for putting into your next deal. Just something to think about before your purchase.
@Charles Baldi lots of good advice, thanks a ton. the HELOC route was what I was planning, but thatll depend on how much I can raise the value, since I plan on putting only 3% down. But I'll definitely do all the research to make sure I have options down the road.
FHS is a great way to get started, with low money down. You can also use the potential rental income st 75% from the other units to help qualify.