Updated about 1 month ago on . Most recent reply
If I was Starting Out Again Today...
#5 House Hacking Contributor
- Realtor
- Reno, NV
I've been investing in RE for about 6 years now in Reno, NV and have learned a ton. I have two properties now that I've improved slowly over time, and cash flow well, but it wasn't exactly a straight line of success.
I bought my first property at 22 and have made plenty of mistakes. Here is my full post on what I regret: https://www.biggerpockets.com/forums/922/topics/1133476-hous...
If I were starting again today, it's a completely different world, and here's my opinion on where I see the best potential opportunity in todays environment when just starting out:
1. Assumable Loans - Yes, 2-4% interest rates are still possible, even in todays market. How? Assumable loans. Almost all VA and FHA existing loans are assumable, and no, you don't need to have saved the full "gap" amount down between the loan balance and purchase price. I work with a lender who can fund down to as little as $25K. I just found a duplex in Reno, NV that has an assumable 2.25% FHA loan...
2. House Hacking - If you're willing to buy a single family home and have roommates, you're ahead of 95% of people I talk to. Most people are NOT willing to do this (life circumstances, having a family, significant other, etc.), but the time to do it is when you're young and hungry to get ahead. A duplex-four plex can work great of course, but usually require more capital (at least in our market). This can greatly impact the outflow you have on your mortgage, and can help you build reserves and/or save money for the next purchase.
3. Don't sleep on New Builds - This is the most unsold, completed new build inventory since 2009. Why? Builders HAVE to sell, no matter the market conditions. Resale sellers may not need to sell, and can typically hold on a lot longer (depending on the seller of course). We're seeing VERY attractive interest rates, $ towards closing costs, and appliances, blinds, etc. included in most new build inventory now. I've also been able to negotiate price and terms for multiply clients, some purchases fairly significantly under comps (especially if they're closing out a community).
4. Seller Financing - This has blown up all over online, and it can certainly be a killer strategy. In our market it's fairly rare to have a seller offering an incredible seller financing deal, but it's still possible and worth an ask. Learn the ins and outs and why it may benefit the seller, and lead with that rather than how it could benefit you for the highest chance of an offer being accepted.
Final Thought:
- Yes, it's still possible to get ahead when you're just starting out, but yes, it will take being creative in today's environment, and there are multiple ways to do that. Real estate is a VERY long term game, and I've never found an owner that regretted purchasing a property they could afford in their 20's or early 30's.
My favorite quote from Alex Hormozi: "It's never been easier to win, but it's also never been easier to do absolutely nothing".
P.S.
What're your thoughts? Is it still possible to win when starting out in todays environment? What strategies have you seen work?
- Jake Andronico
- 415-233-1796
Most Popular Reply
It depends on the community, and how far built it is. If the community is almost fully built, then the appreciation can be decent. If they're still going to be building there for years, then the appreciation typically won't be great. You'll always be competing with the builder. If a buyer is considering your 3 year old home, or a brand new build, with upgrade incentives and rate-buy-down incentives, you're going to need to drop your price significantly to get it sold.
For example, I have my eye on the DR Horton Townhomes off May Anne. They're going to be done building within a year, and there's no other new communities going up around there. But the DR Horton homes in Lemmon Valley are a bit tougher because whenever they're done with that, they'll start a new community right next door.