1st Investment, money down confusion

6 Replies

I am planning on investing in a duplex or single family in the Daytona Beach area within the next three months. For the duplex I plan on renting out 1/2 of it and earn cash flow from the rental. I have access to the first time home owner load and VA loan, but my confusion is regarding the down payment required. I work a full time job and saving up for a 3% purchase is quite over whelming. I’ve dived in learning as much as I can with podcast/books/forums to figure out how to execute my first investment. I’m interested in finding a private lender/investor but how do I connect with someone. Any pointers out there?
@Zoisa Marsden for your first property and just getting started house-hacking a duplex with a primary mortgage with a 3% down payment is a steal. You need to have emergency savings and a maintenance reserves...I suspect if you are having trouble building the 3% then you may not have those important cushions in place. Slow down, save your down payment and reserves then make the jump. Best of luck!

Be sure to always use the bigger pockets calculator to figure out if  you have a good deal or not.  Agree with kelly if you are having a hard time coming up with 3 percent continue to save because that stress level will increase when something happens and you can't resolve it for the renter

@Zoisa Marsden I believe he 3% down has to come from you or possibly from a family member as a gift....with a signed affidavit that the gift is not a loan ( no investor would sign that form obvious reasons). You might be able to go 50/50 with an investor but that would defeat the purpose, wouldn’t it? He would get the rented out portion and there goes your hack.

Great advice @Kelly I. , as I was reading your post @Zoisa Marsden I was planning to respond with the same advice Kelly gave.  Just be patient and save your money.  Knowing you have a loan in place where you only have to put 3% in is fantastic and should be a huge encouragement to you.  Finding a private lender to put down the 3% for you still does not give you any cushion for repairs, cap ex, etc.  

Also, if you were to get a hard money loan or private money loan be sure the numbers still work because they may not.

@Zoisa Marsden Hi Zoisa, Didn’t you just say you have access to VA loan. You can finance 100% of the purchase price. You would just need to come up with the money of closing costs. Do you have a current primary home right now?

@Zoisa Marsden  

I agree with what everyone else has said about saving money and building a cushion. Jumping into a property without one can put you in over your head. 

If you are eager to get started investing and have been doing a ton of learning then why not find a deal or two that you can wholesale? This will get you well on your way to building that cushion as well as a down payment. You'll also be connecting with other investors and getting hands on experience.