Hi Biggerpockets, I'm 21 years old (Total noob to biggerpockets and RE) working as a maintenance man at a Mobile Home Company in the Southern Suburbs of Illinois. I just recently got introduced to real estate by watching a guy on the internet named Jay Morrison. He introduced the idea of getting a duplex, renting the other half out and living for free on the other side. He also mentioned having to put 3.5% downpayment on a home with an Mortage insurance premium of 1.75% upfront. I'm looking to either get my first home in Georgia, Florida, or even here in good ole Illinois. I'm also looking to own 4 properties total by the time I turn 25. If i'm missing some information on understanding an FHA loan please help me out. However I do have a few questions for my fellow biggerpockets community.
1. What books would you suggest to me on getting started on my multifamily foundation?
2. What prices should I be looking for when it's come to my first home?
3. What are good websites to look for homes with FHA Loans?
4. Any places in GA, IL, or FL you would suggest investing in?
5. Any other information you could possibly think of to give a young aspiring investor as myself?
Thank you in advance with all of your respones. Take all feedback into consideration only looking to better myself.
Welcome to BP! You can find all the info you need here on this site. I suggest reading the beginners guide here on BP. I am too looking at first investment property as a live in multi unit and I am 23 years old.
1. I am currently reading Investing in Duplexes, triplexes, and quads by larry loftis and I think its great . Here
is the link to amazon:
2. This will be answered in the beginners guide, but I would recommend speaking with lenders and see how much you can afford and then you can go from there.
3. Redfin.com, zillow.com, trulia.com, homes.com, craigslist.org
4. I would suggest figuring out where exactly you want to live since you stated you want to live in your first investment property. For me personally I have family in the west suburbs of Chicago so that is where I am looking for multi family properties. If you want that warm weather almost year round look at Florida and Georgia.
5. Network, research areas, write down goals
welcome to BP
Welcome to the Best Real Estate Site on the Net.
Click on the "learn tab" at the top of this page, and you could be spending many hours on the Information that is available.
@Austin Richey with your experience in mobile homes, have you considered investing in that area?
@Austin Richey Hey I to am just starting out in my REI career.
The one thing i would say is to take the time to get a grasp on REI "Before" you deploy your first chunk of cash. Study, listen to BP podcasts, study, read some more and delve into the BP resources/community, also did I mention study?
I am of an opinion that your first deal can either be a fantastic stepping stone, or a major setback. And not that you would even have to lose money for your first deal to be a setback, but if it isn't launching you forward then you have sold yourself short.
That being said if you don't know your options through study etc, then you will have a difficult time formulating/building an optimal plan for your REI career.
Also if you haven't read Rich Dad Poor Dad. That's a great place to start.
Welcome to BP. This is a great resource that is getting progressively better as more folks join up and share their experiences.
Here are few good options for getting into properties. Both Owner Occupied (OO) and Investment.
3.5% AND Renovations
FHA 203k loan (http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203kabou)
Homepath Owner Occupied
Not as cheap, but come with renovation options attached to the loan:
Homepath Investment (SFH only)
Homepath Investment (Duplex only)
Homepath Investment (3-4 Unit Buildings)
Q: I like the concept of MFH investing, where should I start?
1. Eliminate your rent payment
2. Bring all deals to the BP community (and be humble when doing so)
3. Stick to the returns you want
Learn everything you can about multi family investing. Every day you should answer a few questions and write down several new ones.
The general theory is that you need to drive costs out of your life and/or add new revenue. If you live with your parents, and they don't charge you rent, good. I'd then start forcing yourself to put $500-700 away each month as a "rental" payment towards some real estate.
If you pay rent of any kind, to your folks or to another landlord, find a way to eliminate it from your life. My suggestion is to find a 3 or 4 family property that you can purchase. FHA loans are a good way to go, but be wary of the additional percentage points you have to pay each month as PMI. VA loans are even better, but require you to have served in the US military.
Run every deal you find through the BP community. Some of the responses are harsh, but they are eye opening. There are people on this site that have been buying and selling 4x as long as I have. When I find answers to my daily questions, I can almost always find the answers here at BP.
Last one for the moment: stick to your numbers. It bears repeating: stick to your numbers. If you want $200/month and a 12% Cash on Cash return for your investment, stick to that number. If you pick 12%, 9% is not good enough, nor is 11.7%. Make your offers accordingly.
make sure you've checked out everything here: http://www.biggerpockets.com/starthere
Your plan is solid for starting out! FHA loans are available on all sorts of properties listed for sale (not every property though). You don't need to look on a specific website- you may be thinking of "homepath" loans, which is a little different. (Also a potential source of a property for you though).
Illinois is a good market for investing. I'd say that with your maintenance skills it would make sense to invest close to home and do your own management for awhile before you try anything at a distance.
Your goals aren't unreasonable. But be careful about setting goals in terms of numbers of properties, because a property that is not performing well is not worth having. Good luck to you!
@Joe Santiago Thanks for the leads and advice. I hope to own my property as young as you are. You're rocking bro, that's inspiration. Which areas are you looking at in the Western Suburbs. I've been looking towards the Elgin area, is there any good areas that you'd would suggest?
@Timothy Riley Thanks for having me. :)
@Raymond B. Thanks for the welcome. :)
@Anthony Gayden You know I wouldn't mind investing in the Mobile Home business. I've learned so much in the past 2 years of working the trade. From water, gas, sewer, electric, plowing. I wouldn't mind investing in a few parks, I figured my multifamily units would be my foundation to all of my real estate goals. Thanks for asking such a great question, do you have any suggestion for me bud?
@Brenton Kasselder Thanks Brenton, you're totally correct. I should totally do more research before I make my investment property. I definitely don't want to sell myself short. I know Joe mentioned the book by Larry Loftis, do you have any suggestions?
@Aaron Montague Thank you so much for the variety of loans, this has been extremely helpful and informational. My first deal i'm aiming for rent free and also profitting 300+ a month, do you think i'm asking for too much? Honestly, I'm thankful to even live for free, or even if i'm paying 100$ to live every month it's more than reasonable. However, this is not the reason any of us got in the business. I'm here to invest to make power returns.
@Jean Bolger Thanks for the advice. I think i'm going to do more searches in Illinois. I should take it easy and take it step by step. I'm so eager to learn more and more things, just want to give my family a luxurious lifestyle.
Thanks all for the respones and tips. Please feel free to comment more, I enjoyed writing you guys back. You have been very informative to a young "tutor the turtle" such as myself.
Until we meet we speak again,
You choose to get into a business, now treat it like one. You said it yourself: "Power Returns." It's never asking too much. Stay your course, find the investment that gives you what you want and jump on it when it shows up.
You put yourself in that position to live for free. You picked up the phone at the right time and made the deal. You negotiated the deal that brought your finances in line to eliminate your rent payment. Thank yourself, you've done well :)
@Austin Richey Welcome to BP. Here is a good blog about what books to read. My favorite that got me inspired to start into REI many years ago when i was about your age, was "How I Turned $1,000 into Five Million in Real Estate in My Spare Time". I wish I had the internet and BiggerPockeets when I started investing.
Yes, a duplex, triplex, or quad can be a great way to start out.
There are too many variables to answer on the price.
- Your down payment
- Number of units
Woops, I forgot the link to the list of the blog of good books.
@Austin Richey sorry, I can't help you in terms of mobile home investing. I invest in multi-family apartments and am still rather new.
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