Just graduated college last year as an engineer and right now I am having a really tough time finding a job. In the meantime I have been reading a lot of investing books and I am very passionate about getting my first deal in. However, I have a limiting factor in my way which is not having a job hence not being able to finance any properties.
I do have cash saved up for a down payment but I was wondering what is the best way for me to buy a property with no job. Please any and all feedback is welcome.
Even though this may be a “limiting factor” I never limit my mindset. I know that there is a way for me to buy a property; whether it’s partnering up with someone, having a co-signer, or hard money lender (possibly ?), but I just want to hear what BP has to say.
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
5y
I would focus on getting an engineering job first. What is the focus of your degree? Have you had people in your proposed dream job critique your resume and Linkedin profile? You don't want to put yourself in a position where you end up in a financial mess. Where do you live?
Conventional mortgages are likely out of the question. They require pay stubs and sometimes W2s or tax returns. Next bet for you would be partnering with someone (you contribute to the DP) who does have some of basic qualifications a lender looks for or a co-signer. Final option would be a HML but they will charge for the risk premium.
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
5y
I would focus on getting an engineering job first. What is the focus of your degree? Have you had people in your proposed dream job critique your resume and Linkedin profile? You don't want to put yourself in a position where you end up in a financial mess. Where do you live?
Real Estate Investor · Springfield, MO · Member since 2017 · 1k+ posts · 2k+ votes
5y
People buy houses all the time without traditional jobs, but to do so they have to use non-traditional means.
First, what kind of property is this: SFH, 2-4 plex, small apartment, etc?
Next, who is likely to lend on that and why? How much income will it generate, and if you're living there will that be enough to cover debt service and still leave you with a cushion?
Finally, what costs are you prepared to pay and what's your timeline? Hard-money is usually expensive and short term: mostly useful for rehabs and only good for 6 months max...maybe 12 if it's a steal of a deal, which is hard to find in the current market. Owner financing is usually a cheaper and more flexible option if you give them enough down payment to make evicting you and any tenants a happy-happy deal for them (i.e. they're happy whether you pay or get foreclosed on). Another thought would be a lease with exclusive option to purchase: you pay rent for X-months and give the Seller a fee to reserve the property for you to purchase sometime in the future at a price you agree on today, and at the end of the lease you hopefully have your job and can buy the property using traditional financing.
@Seb Ko Yes definitely not even thinking about conventional financing. I am most defiantly thinking about a partnership but most of the people I know are very risk averse and don't like investing their money.
Investor · Durham, NC · Member since 2020 · 1k+ posts · 691 votes
5y
A way that we have been able to get into properties creatively is through seller financing. These are hard to find but wholesalers sometimes have these opportunities. You could also try to go direct to seller yourself and structure the deal in a way that works for you- if you are not to familiar with the strategy it may not be the best way to get your first but it is a great way to get started.
Plenty of private/collateral based lenders who care little about borrower income when making a secured loan.
Bringing on a partner is not a bad idea in my experience, however, as long as you have a good deal on hand, you end up giving more of the deal to the partner than you would comparatively with a lender.
I've never heard of a private lender charging a risk premium due to lack of employment, learning something new every day!
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
5y
I think you are looking at this in the wrong way- sure, there are lots of ways to finance properties without a conventional loan, but in most cases, a conventional loan is the best bet.
You say you haven't been able to find a job, do you mean as an engineer? Employers all over the country are desparate for employees- even restaurants are paying signing bonuses for wait staff. If you can't find a job as an engineer, get a job doing something else- literally anything else. It doesn't have to be a career, you can still search for an engineering job at the same time, but there's no reason that anyone should be unemployed right now.
Indianapolis, IN · Member since 2021 · 193 posts · 150 votes
5y
@Masood Amin partnering with someone could be a great option for you especially if you are newer to the industry. In addition, a HML but they do charge. When partnering with someone make sure you build a relationship first because end of the day it is not just about the property, it is about the partnership.
Thanks for the feedback. I’ve been looking for a partner for a while now but everyone I know is very risk averse and unmotivated. If you have any connections feel free to share my name I can send you my number if you PM me
Real Estate Syndicator · Phoenix, AZ · Member since 2018 · 903 posts · 1k+ votes
5y
@Masood Amin Get a job. I'd focus there first as it will make everything else much easier getting started. However, some lenders will work with you if you have the down payment and a good business plan for an investment property. Presenting the projections and future income matched with existing leases or rent rolls on a property has worked. This is demonstrating property income or the business plan. You will be better off however having other forms of income to back this up, ie. a job or business.