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Hi everyone I'm Kevin I'm 20 years old and have around $15,000 down saved up and I'm looking to get my first rental property here in Portland Oregon or Oregon City. My plan is to get an FHA loan for a duplex or triplex and live in one of the other rooms. I'm barely starting my search but I was looking to see if anyone had any pointers or recommendations for me.

Jeff Roth · Answer

Hi Kevin from Portland Oregon!

Great question. You are 20-years-old and have around $15,000 saved. Your plan is to buy a duplex or triplex and live in one of the units. Great plan. You asked if anyone had pointers or recommendations.

We love to see young people getting after their real estate goals.

A few thoughts:

1. Try to get a property where the utilities are already separated.

2. Side-by-side duplexes and triplexes tend to rent for more for each unit as rents tend to be less with more stairs.

3. Try to get a property with plenty of parking for everyone with ease to get in and out.

4. Some storage is nice like a shared garage or basement.

5. Two and three bedroom units tend to have less turnover as people have more space than a one-bedroom especially if they have some storage.

6. If you have it in your budget or can budget it in, think about having a property manager manage the property and you can act like any other tenant and not have to deal with tenant issues.

To Your Success!

Kevin Dominguez · Answer

@Bo Smith I am still searching and haven't been pre approved just yet

Scott Bowles · Answer

Hi Kevin, I love the Oregon City area and Clackamas county for investments in general. Portland also has some strong data suggesting things could be on the upswing. I am a realtor in the area and own multi unit both in Clackamas county and Portland. Happy to chat a bit I will shoot you a DM!

Bo Smith · Answer

Kevin, solid house hack plan! Don't forget vacancy and maintenance in your numbers - maybe 8% for Portland. Also FHA goes up to 4-plex if you find one. Are you pre-approved yet or still researching?

Scott Chilton · Answer

Kevin, you are starting in a smart place and at a great age. Having fifteen thousand saved and a plan to live in one unit puts you ahead of most people already.

Using an FHA loan on a duplex or triplex is a solid move. It lets you get in with low money down and have the other units help pay the mortgage. The big thing to focus on right now is buying a deal that works even if life gets a little messy. Run the numbers as if one unit is empty for a bit and make sure you can still sleep at night.

Look for simple properties in decent neighborhoods. You want boring and solid, not fancy. Older places are fine but watch the big items like roof, plumbing, and electrical since those can eat your savings fast. Also leave yourself a small cash buffer after closing so repairs do not turn into stress.

Take your time building a local team. A lender who understands FHA and small multifamily deals and an agent who works with house hackers will save you mistakes. If you buy right on the first one, this property can set you up for years by building equity, covering your housing cost, and giving you options for the next deal.

Mackaylee Beach · Answer

First of all, congratulations on embarking on your investment journey at such a young age! It's wonderful that you're taking steps to secure your financial future.

• Research the Market: Familiarize yourself with the real estate landscape in Portland and Oregon City. Understanding property values, rental demands, and neighborhood trends will empower you to make informed decisions.
• Inspect Thoroughly: Always ensure a professional inspection is conducted before making a purchase. This precaution can help you avoid unexpected repairs and expenses later on.
• Consider House Hacking: This is an excellent way to begin your investment journey. I highly recommend ensuring there are separate meters for utilities.
• Stay Informed: Real estate laws and market conditions can evolve. Keep yourself updated on any changes that may impact your investment.

Remember, investing in real estate is a marathon, not a sprint. Take your time to make the best choices for your circumstances. Wishing you the best of luck on your journey!

Ben Fernandez · Answer

Congratulations on your progress! Keep up the good work.

Most importantly, run a cash flow analysis and understand how to assess the life-left in the property's components (or assess projected CapEx expenses) based upon your findings on any subject property.

Outside of operations, running numbers is essential to your success. The better you plan and are aware, the better your potential performance.

Corby Goade · Answer

Welcome and congrats! I think your strategy is the absolute best way to start, so you are on the right track.

The only feedback I have based on the info that you've provided, is if you can afford to do a conventional loan at 5% down rather than FHA, you'll be much better off in the long run. That mortgage insurance will kill you and you'll spend thousands to refi out of that FHA loan. Conventional will be a much better bet.

Best of luck!

Aaron Zimmerman · Answer

Welcome and you're thinking about the right things already at such a young age.

At this time, I'd focus your time on attention on networking (biggerpockets, facebook, and in person meetups) to expand your network.

I would also focus on analyzing deals, understanding financing, and knowing what a good deal looks like for you. Books and podcasts are great. I'd start with BP and see if there's any local podcasts too.

if you haven't already, I'd highly recommend you understand personal finances too (which you seem to have done since you've saved $15k).

Chris Watkins · Answer

Hey Kevin, welcome to the BP forums!

I love the house-hack plan. It's a great way for new investors to get their foot in the door with less money.

Oregon City is a good place to invest, too. Our main office is in downtown OC and it's a growing area, for sure. Being outside of Portland city limits is preferable due to the less-favorable tenant laws within Portland.

A good first step is to talk with a lender (like me) to get a handle on your financial picture with regards to qualifying for (and affording) a mortgage. It's important to be able to see exactly where you are now and find the best path forward if there are areas (credit, income, cash, etc..) that you will need to boost before you can qualify.

FHA can be a great option if you're looking for a duplex, but it won't likely work for a triplex due to some quirks of the loan type. $15k is not going to get you very far on a duplex purchase unless you're able to get concessions to cover closing costs, however.

I'd be happy to chat via DM, phone, or in-person in Oregon City. I know some good investor-friendly agents in the area, too, so I'm happy to be a resource.

Chris

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