Zero Experience Newbie w/$15k cash to invest. Suggestions?

Question

Hey all,

After reading a few books about real estate and business I think I found my calling. Still learning the vocabulary, but am a quick learner.

I have poor credit score, but a full time job for w2 income. I have no properties yet and still need to find local connections to get started.

I may have access to more capital through family, but right now $15k cash is where I am sitting right now.

Our house is in my wife’s name. We would be willing to do HELOC for additional funds. We only have $40k in equity there currently.

Any advice is welcomed. Fire away!

Ben Scott · Answer

If you're doing a househack, you can get an FHA loan for a property up to 4 units. So you could purchase a duplex/triplex/4plex with an FHA/VA loan, live in one side and rent out the other(s). You would not 'cash flow.' But you would almost eliminate your housing costs. Would it be uncomfortable/awkward, maybe. But making such a purchase would springboard you into a real estate investing career without much capital.

Sam McCormack · Answer

@Preston Patterson

Hi Preston, before you start investing, I would suggest that you fix your credit score first. It's going to make you look a lot better to lenders would trying to obtain a mortgage. As well as saving you a lot of money in the future from having to pay more interest. It may not be as glorious as you would imagine it is, but definitely a good move to make. I wish you the best of luck and to do your research on how to fix your credit score fastest!

Greg R. · Answer

Definitely start with your credit. You can try a credit repair company, hired one for my wife many years ago with some pretty good results. They basically send letters off to your creditors in an attempt to get them to remove the negative mark on your credit. Takes a while though, so you want to start asap.

Rates really high, you don't want them to be even higher die to poor credit.

James Dainard · Answer

Hey Preston,

First things first is to improve your credit score asap, it will drastically impact the cost of money for you.

After you get that in place you're probably going to want a 3.5% down FHA loan on a duplex. This will maximize the income you're getting. If you can't find a suitable duplex look for something you can house hack by renting rooms and/or floors out.

I recommend finding a local lender to work with through your credit issues so they can be best positioned to help you when you're ready to buy!

Best of luck!

Ben Scott · Answer

Have you looked at doing a house hack? Then you'd only need 3.5% down with an FHA loan. Maybe your wife could apply for the loan since you have poor credit. Mortgage could be in her name but deed could be in both your names.

Eliott Elias · Answer

Put a down payment on a hard money loan on a flip or partner with someone and do a deal 50/50. Your Max you can spend to be all in on a project with 15k is 100k

Preston Patterson · Answer

@Ben Scott

Don’t FHA loans have to be for primary residence or can it be for rental property?

Zero Experience Newbie w/$15k cash to invest. Suggestions?

Zero Experience Newbie w/$15k cash to invest. Suggestions?

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