Newbies here and looking for suggestions.
-Good Full time job, high 700 credit score, low debt(student loan), 50k cash saving, studying PA agent exam.
-Market: Chester county, PA , West Philadelphia suburban.
-Goal: House hack to start with , and rental or flip. Planning to get 1~2 properties.
-Timeline to buy: now till mid 2021. (Currently renting)
1. what kind of loan is the best options to go? I definitely want to buy 1 and rent out other spaces; I also exploring the other of buying 2nd property . Is there anything U will recommend me to considered when looking for loan as 1st time buyer, house hacker and potential 2nd properties?
2. What things I should look at when finding an agent? I saw some articles saying “find investor friendlily agent” what does that mean exactly? Just experiences with investor?
3. Any suggestions on the Chester PA county market (west Chester, Exton, Kenneth square, downington ) area? Anyone does rental properties? What’s the vacancy rate/tenants ?
4. I plan to take the real estate exam early next year, if I get Lucky and pass before I buy anything, is it a good idea to close my 1st property on my own purchase ?
Thank you for your time, any suggestions and thoughts would be highly appropriated. :)
Happy learning and investing!
Welcome to the area - I've been in Chester County almost my whole life, but my wife and I chose Delaware county for our rental investments based on what we could find where the numbers were favorable. Feel free to DM for other details.
To preface - we are amateur investors, both with unrelated day jobs which sponsored our investments initially.
To address your questions directly:
1. Because you're going to live there - you have a conventional mortgage available to you which is going to be a great interest rate. Making "cash" offers can make an offer more aggressive- but a conventional mortgage where you are putting 10 or preferably 20% down is still reasonably strong, but in addition to approvals and inspections conventional mortgages also take 30+ days to close, and sellers often prefer faster deals.
30 year loans are good for initial cash flow since your monthly payments will be lower, however 10 or 20 year mortgages are less interest rate and good for faster equity growth, but will hurt your cash flow. If you were going to live someplace for 10 years - i would definitely recommend a 20 versus 30 year loan - but if you're going to move out after its fixed up and rent it - then you will need to decide your own financial preferences but maybe the longer term 30 year loan and lower monthly payments work out better for you.
I've had positive experiences with the Franklin Mint Credit Union just FYI - theres a million mortgage brokers out there.
2. My advice is to do 99% of the selection yourself and ask them to set up the house visits to places you select. they will probably give you access to an MLS database that runs about 24-48 hours ahead of Zillow, so pick houses from there. As somebody starting off - you're going to have to define what you want (or go and see it), and see if they can accommodate or make other suggestions. They're going to try to convince you to do whats going to make ANY deal happen - just make sure they dont seem pushy or try to get you to do something outside your comfort zone, and dont be afraid to say "no".
3. Alot of appreciation over the past decade makes local deals hard to find. Lots of rentals have been owned by the same person for 20+ years, before appreciation, and so the house value versus the rental income doesnt add up (Swopes, Zukin, McCool...ect). It is relatively cheap to rent in West Chester for example, due to lots of student housing that got moved on-campus or to Goshen. My wife and I chose to invest in Delaware County based on finding properties that are closer to the 1% rule, but the taxes in Delaware county are much higher so thats another factor to consider. Lancaster seems to be an exciting place for investors lately from what I can tell.
4. The timing of your first purchase deal and the status of your real estate license journey should be unrelated. If you find a place that you're confident on - just get it one way or another as quick as you can since good deals are super hard to come by especially in Chester County.
I'm sure the above has plenty of opinion in there - I just thought I'd try to be helpful. We still are only part-time investors so we're certainly not experts, but we're definitely not losing money while we gain equity which is critical. I mentioned before but feel free to DM if you want to do a zoom call or something.
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