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?

@Cole Druffel

Hey Cole, what are the details? Are you saying you can’t qualify for any kind of loan? What market are you in? What are your goals?

Learn your market and learn to market.  

If financing is the primary hurdle, find a mortgage loan officer in your area and ask for a 15 minute meeting. Ask to review your finances, maybe do a soft credit pull, find out your strengths and weaknesses and go from there. You may be able to get approved with a low credit score and not even know it. 

If you can't, at least you know for certain and can take the first steps to getting on the right path. You first have to diagnose the problem before you can fix it. 

I would also suggest finding a duplex with at least one tenant so that income can be counted toward your income improving your debt to income ratio. 

Originally posted by @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?

It all starts with education. You need to learn your niche and your market. Immerse yourself and become an expert in the space. For your particular situation you need to study creative financing and private lending. Learn how to use other people’s money. 

@Daniel Haberkost

Sorry for the missing detail to start I believe I can qualify for an FHA loan but am unsure how to get my paperwork in order to do so. Goal wise I would like to focus on it full time that being making enough income from my investments to be my main source of income and for market I currently live just north of seattle and am hoping to start there.

@Cole Druffel

So you should talk to a lender and see if you can get pre qualified. If you can’t, they will be able to explain why and tell you where your income/debt/credit score need to be in order to qualify. Also, I would attend your local real estate meetups and spend more time reading/learning about investing.

-Dan

@Cole Druffel I would suggest working for someone who is already doing what your looking to do. Not only will you get hands-on experience but it could lead to potential opportunities to partner with them on upcoming projects. 

@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!

@Cole Druffel - House hacking is for sure the best way to go when you have little money. Maybe you don't do a duplex, but instead you purchase a single family home (likely cheaper) and you rent out the rooms individually?