Young buyer & first timer

[Jeremy Torres]

I’ll be 21 soon and there’s a duplex I’m wanting to buy . According to realtor.com the listing price is $185,000 and all units are currently rented . All I’d have to do is buy the tenants are there already. I was wondering what kind of loan I should use as a first time buyer and need some good opinions and suggestions. I have $15k in savings. This will be my first investment property. What should I do ?

[Cameron McCown]

$15,000 is about 8% of $185,000. The closest Conventional loan would require 20% down, so that's not an option. My suggestion might be to purchase it owner-occupied, which means the seller would need to let one of the leases expire. That would allow you to put 3.5% down on an FHA loan, which is $6,475, and have the rest for closing costs and reserves.

Another possible option is to get a hard money loan for the $185,000, but HM lenders I know are going to be shy about 1) loaning to a first-time investor and 2) loaning on a property with tenants whose leases are up in the next 3-6 months.

Hope this helps.