Newbie Advice on buying home 0 down 100% financing

13 Replies

 I rent in NYC (astoria queens) 10 min from manhattan and work.

I work in tv/film which is by definition freelance even though I've been working for the last 5 years pretty consistently

I have access to Navy Federal Credit Union which do offer $0 money 100% financing and said with my current debt to income ratio and 683 credit would only give me $280k-$350 (not much to buy anything in NYC) the only thing I find is condo/coop which won't let you rent. 

My vision 

1. Buy fall back place if i ever get kicked out my apt I can move in and rent out rooms to help continue to pay mortgage. (even a finished basement) I don't care about luxury. 

2.  Rent it have someone else pay my mortgage and some cashflow on top. 

3. Build equity start making some type of financial capital in that order to get another place in a few years.

Yes I'm in credit card debt $27k in debt and only make $60k-70k a year but 15k of that debt was to buy low end vintage cars to rent to movies, which paid $7k in a week this month. Yes it's very inconsistent but I was desperate to make a move and I did it. 

So my question is if anyone has experience in the NYC/NJ market. What advice would you give me about buying in a home 0 down in order to fullfill my vision.


 

Originally posted by @John F. Hebert :

 I rent in NYC (astoria queens) 10 min from manhattan and work.

I work in tv/film which is by definition freelance even though I've been working for the last 5 years pretty consistently

I have access to Navy Federal Credit Union which do offer $0 money 100% financing and said with my current debt to income ratio and 683 credit would only give me $280k-$350 (not much to buy anything in NYC) the only thing I find is condo/coop which won't let you rent. 

My vision 

1. Buy fall back place if i ever get kicked out my apt I can move in and rent out rooms to help continue to pay mortgage. (even a finished basement) I don't care about luxury. 

2.  Rent it have someone else pay my mortgage and some cashflow on top. 

3. Build equity start making some type of financial capital in that order to get another place in a few years.

Yes I'm in credit card debt $27k in debt and only make $60k-70k a year but 15k of that debt was to buy low end vintage cars to rent to movies, which paid $7k in a week this month. Yes it's very inconsistent but I was desperate to make a move and I did it. 

So my question is if anyone has experience in the NYC/NJ market. What advice would you give me about buying in a home 0 down in order to fullfill my vision.

Hey John,

Its always great to connect with fellow Queens residents!

With regards to purchasing a deal with 0% down with your vision, I'd focus on 1 of 2 things.

1. Pay down your debt - I like the car investment and it makes total sense given the fact you're in the industry. I also understand that this is inconsistent but I also see a ton of potential in that business given the market you live in. Earning some extra $ from this investment can help you lower your debt-to-income ratio (DTI) and get you approved for a higher amount. The higher amount will give you more options for multi-family deals that can bring in some cash.

2. Focus on more affordable markets near NYC - NJ is a market where you can get into the multi-family game as a house-hacker, be close to the purchase price you've already been approved for, stay close to your job, and get in the property with 0% down.

Best of luck to you moving forward!

Abel

@John F. Hebert

I agree that you need to reduce your debt.

After that, I'd suggest looking north of Westchester county. Plenty of relatively affordable property in orange county, dutchess county, even parts of Putnam county.

Thank you both for the feedback. It's absolutely my goal to cut my debt in half by the end of next year. Bill how is the rent to buy ratio in those counties? This is what I'm having trouble with, how reliable is rentometer.com? I mean it got my area in Astoria all wrong. So I'm having trouble trusting it. I KNOW Astoria like the back of my hand, and we all know most people rent in NYC area, can you count on areas like dutchess, orange county to have your place stocked with tenants like in NYC?

You probably can't get 100% financing except for owner occupied. Apparently it is your intent to rent the property. Not only can that get you in serious trouble (bank fraud) but your heavy debt load is very risky.

My concern is you may not know what the true expense of owning a rental is and rather than helping this could hurt your financial situation.

From the little you wrote it seems you are making bad financial decisions because you are desperate. If you want to succeed start making good financial decision starting today.

I know I am reading a lot into your post and don't know you actual full situation, but that is what comes across.

Thanks Ned, 

        I plan on house hacking my first home not buying a home and telling them I'm living there whilst renting it out. However, I'd like to live in a finished legal basement and rent out the 3 bedrooms separately to roommates to pay my mortgage for example. The trouble I'm running into is making the numbers work with cost of buying the house in relation to to the rent I could charge in the NYC/NJ area, and ya know...actually wanna live there! 

        I sure have made some risky financial decisions like buying vintage cars to rent out to movies out of desperation but it was a smart move and has paid itself back in money as well as days towards my health insurance and pension (SAG-AFTRA) and will continue as long as they film movies in NYC at least. 

       

@John F. Hebert

House hacking is definitely your best option. It will take time to get a deal as the market is saturated in Nj/NY. You are truly up against sharks. When/if you see a good deal people will pounce and out bid you with all cash offers. Check out the deals I have gotten done and that may inspire you to look in other areas. You can also check out my “No Money Down Real Estate Investing” podcast on Spotify. I am from north jersey and understand the struggle.

@David Flores Thanks! Yes I'm seeing that ocean of sharks already with the first place I even considered in Union City NJ having people put up cash sight unseen. 

I also just read a few blurbs at your creative dealings. Having the seller pay the 20K downpayment by raising the purchase price. genius. I have a lot to learn. 

@John F. Hebert

Yeah that deal worked out well for the both of us. Sometimes you cant let it become a bigger ego game. I gave him 20k extra on the price but i walked away with barely putting any money down and I got an income producing property. Creative financing is the way to go.

I don’t want to strip your hope from nj/ny area but it is hard to play with the sharks. Not saying its impossible, I dont think anything is impossible. But, it will take a lot of time and effort to finally land on something you will like and the numbers agree. I have put in about 20 offers in hudson county and was outbid on every one, usually from all cash offers.

Totally against the real estate worlds advice but we ended up settling on a single family condo in weehawken for my personal living place. Through appreciation over the next couple years its not a bad move but getting a house hack situation would have been way better. We plan on living in this condo for 1-2 years and then renting it out and moving onto the next one. Hopefully by then the market will drop, but i think hudson county will never be cheap. Too much demand. I noticed a lot of people from NYC are moving here, cough cough lol


@David Flores I have a female friend in Edgewater NJ who is sorta holding my hand to start all of this. Her partner/husband is a reverse loan officer and they've done a few flips with larger plans to create an apartment building in Union City. This definitely gives me hope that I could snag a place in that area but we'll see. 

Jamaica Queens, Cypress Hill also seems to have a similar line up of houses in the $375k but that would require living in a not-so-nice neighborhood until it "comes up." Listening to your podcast now. Excited to see what I can implement within the next year. 

@John F. Hebert

Yeah good luck! Having someone in the loop there will definitely help. The best way to get a deal done in that area would be a pocket listing (off-market) to avoid all the comp.

Keep me posted man! Let me know when you get one of these deals done and I would love to have you as a guest on my podcast.

@John F. Hebert house hacking is a great idea. Even if it doesn't give positive cash flow it helps reduce you cost of housing and you have to live somewhere. 

There are plenty of places in the counties I mentioned that have solid rental markets, including a few cities. Haverstraw, peekskill, Beacon, Newburgh, Poughkeepsie, Kingston, even Albany.

I personally chose to move to Fishkill and I am an investor in Newburgh. 60 miles to NYC on i87 with two bus terminal an airport and access to metro North. Is it Brooklyn,no. But it costs less and I can make the numbers work.

I no longer commute to the city, but I did for years. You could if you want to, or you could invest up here and stay in the city..

Bottom line, fix your financials, study your options, and then make a move..

@Bill O'Donnell Thanks yes I'm repairing as I type. Knocking down cards $500 a time with the snowball method is proving beneficial. 

Turns out my FICO is 699 creeping up according to Trans Union and Experian which isn't as horrible as I thought. 

My year goal is to cut my debt from 50% utilization to 20% that means knocking out $10k in debt on a $65k salary living in NYC. Yikes, which is tough, but I'm gonna do it. 

Seller financing, business lines of credit and other creative ways to buy an investment condo with brings in cash flow are still on my radar none the less.

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