Whats the best way to get started in property invesment?

[Cole Druffel]

I have no real experience in property invesment but have been researching it for a few months now as I am very interested in getting into it. The most obvious route is going with a duplex by applying for an FHA loan but for this it seems a tad difficult wage wise. What is advice you would give to someone who is not well off already and good routes to take to get started?

[Michael Haas]

@Cole Druffel
A FHA multifamily is a great place to start, and you definitely need to talk to a lender sooner rather than later - don't assume you can't qualify until you try!

If you're having trouble gathering the down payment, there's a Washington State Housing Finance Commission program that could help. WSHFC is a non-profit dedicated to helping every Washingtonian own their own home, and this program allows us to take out a loan with 3% down, then get 4% down payment assistance so the cash required to close is super-minimal (as little as $6,000 in some cases, depends on the purchase price of the property though).

This strategy works really well when you can combine it with “house hacking” – finding a house with separate entrances or a tall basement that can be rented out while maintaining your privacy. One reason this works so well is that owner-occupant financing (when you live in the house) has lower interest rates than investor/landlord financing, so you get the best of both worlds if you rent part of your primary residence out – rental income, tax deductions, and low interest rates on your home loan.

A lot of people I work with have no idea that programs like this even exist, and just assume they need 20% down, or a $100k, to buy a house. Totally not true! I definitely don’t want to push you either way on a big decision, but if buying a house someday is something that’s on your radar I do want to make sure you know about all your options.

You need to attend a homebuyer’s class taught by a WSHFC trained Realitor and Lender, I’m trained and am teaching a few of these early next year. 

Feel free to message me if you want an intro to a good investor-friendly lender, or want to talk more about house hacking!