Investor 路 Albany, OR 路 Member since 2019 路 22 posts 路 4 votes
My son who turned 18 in Jan, has been working for the school district and was approved for a conventional loan. The only issue is he's only approved for $180k. There is nothing habitable in or around Albany Oregon for that. Is there another route he could try? His goal is to get his first house before he is 19. He's been saving 90% of his checks each month. Any ideas or other strategies he can try?
What are your finances like? You could co-sign a loan and go on title. Look for a duplex or place with a suite. You get half and deal with those tenants and he takes care of his place.
What are your finances like? You could co-sign a loan and go on title. Look for a duplex or place with a suite. You get half and deal with those tenants and he takes care of his place.
Real Estate Agent 路 Portland, OR 路 Member since 2020 路 278 posts 路 136 votes
3y
Hi Nessa! Congrats on your son being ambitious enough to make that first step.
I agree with @Theresa Harris that it would be a good idea to get a cosigner on the loan. The DTI is the biggest factor for loan programs these days.
Since you are in Oregon, I'd also talk to lenders who have access to the Oregon bond program. It is supposed to help first-time home buyers and may be able to give them higher flexibility.
Depending on how far out he wants to go, I'd look into using the USDA loans potentially.
Talking with a lender about what he would need to do in order to increase that amount would probably be a good idea so he can see if he can position himself in the future to be pre-approved for more.
If you need any lender recs, I'd talk to @Julee Felsman since she is in the Oregon area. If you need any recommendations in Albany, let me know too and I'd be happy to connect you 馃槉
Real Estate Broker 路 Corvallis, OR 路 Member since 2022 路 35 posts 路 9 votes
3y
I have a couple ideas Nessa. I think it does make sense to speak to a couple lenders and if it doesn鈥檛 sound feasible, work into a program with DevNW.org, they have some programs from time to time to help low income people with savings match and down payments. Generally good for people that are looking to buy in 1-3 years. Ask lender about: 1. Options for manufactured home on land, those are at lower price points and can have opportunities for forced appreciation and are common in our area
2. FHA 2-4 units (I think I mentioned this to you as an idea), tough to get numbers to work right, but might be able to as the non-owner occupied units go towards income to help DTI.
If traditional lending still isn鈥檛 an option, we need to help him get creative with a subto or owner finance deal. That will require some capital to send letters to targeted group, but it will be a compelling story.
We (Jesse Brown & I) are planning to do start a 90 day challenge to buy an investment property. We are planning to charge a minimal amount to be included in the classes, but I鈥檇 like to cover Ty鈥檚 fees, if he鈥檇 like to join the class. Let鈥檚 chat next week. I think we are going to discuss the basics of the 90 day challenge class to the group at the WVREI meeting on Tuesday.
Rental Property Investor 路 East Wenatchee, WA 路 Member since 2014 路 10k+ posts 路 16k+ votes
3y
Kudos to your son (and you as mom) for having this drive, motivation and work ethic at such a young age.
I also have an 18 yo. If he demonstrated he is committed this much, just a bit short of the finish line and I believed in the deal, I or a close family member like his uncle, aunt, grandparents would buy with him as TIC (tenants in common).
I would then quitclaim to him a portion equal to the annual financial gift exemptiion ($17k in 2023) every year he operates it effectively. Or something to this effect. He is held accountable every year, then rewarded.
A TIC purchase to me would be stronger than co-signing the loan which puts the family member on the hook no matter what. A TIC 'partner' will have a say and be better able to guide a youngster @Nessa Lyn .
My son who turned 18 in Jan, has been working for the school district and was approved for a conventional loan. The only issue is he's only approved for $180k. There is nothing habitable in or around Albany Oregon for that. Is there another route he could try? His goal is to get his first house before he is 19. He's been saving 90% of his checks each month. Any ideas or other strategies he can try?
Well math is part of the reality check of this business.
He is bringing to the table $180k from his lender plus his down payment and closing costs.
Cash is King/Don't bring a knife to a gunfight.
Some things cash in hand is good for: --Cash closing costs that are typical for your area for the buyer to pay. --Cash fix up money. --Cash carrying costs for times when the unit is un-rented. --Cash reserves for big and small repairs and appliance replacements. --Cash to handle attorney fees to remove non-paying renters. --Cash down payment as dictated by the lender. --Liquid cash as dictated by the lender. --Cash for the difference in the lender down payment required + $180k and the amount needed to gross up the purchase to the minimum amount of an acceptable unit in your area.
He may have to save more until he closes the gap between the loan and down amount and the cost of a home he thinks is rental material for his portfolio.
Is he the kind of guy that can hammer swing his own renovations, and make them look professionally done (did he take woodshop in HS or spend his time in Home-Ec or some other non-hammer non saw type classes.
If he can do that, he's one up on a lot of people as his labor is free, but the holding time with no renters is not, and can add up to using a pro to make more money otherwise.
Investor 路 Milwaukee - Mequon, WI 路 Member since 2010 路 5k+ posts 路 7k+ votes
3y
Agree with Steve. But I am not sure if helping financially is the best option. Sometimes in life you have to work a bit harder to get to what you want. He is doing great and I would encourage that. This keeps him hungry, while getting helped takes some of the success away from him. I imagine his income will increase in the next years, which will lead to a higher PA amount. And then he can say he did it on his own. As long as he is not wasting money on rent, staving up another year and figuring out how to earn more money might be a healthy thing!
Lender 路 San Antonio, TX 路 Member since 2023 路 19 posts 路 9 votes
3y
if he looks like a triplex or a 4plex, he should be able to use projected rents to offset some income there which might allow him to get a higher amount. plus he will already have his first few rentals if he goes that route as well.