my credit score is 760 right now and I currently have $3500 saved up for a down payment, if I was going for a condo to start as my first rental property, assuming it was somewhere around $150,000, would I be able to do it with such a small down payment? And if so would it be worth the risk to start with such a small down payment or should I save up more before jumping in? Thanks!
If you are going to live in the unit then you can do the 3% down strategy.. however if this an actual investment property, and you just want to do traditional financing, then you will need ~20% down.
Either way... if you only have $3,500 saved up then I would say hold off. Not to have a bigger down payment but to have a cash safety fund. Also, lenders usually want to see that you have 3-6 months of mortgage payments in cash reserves after purchase before they will approve you for the loan.
You'll need 3 - 5% down if it's owner occupied. If you intend it to be strictly a rental, you'll need 20 - 25% down. You should really speak with 3+ lenders and see what your options are before getting too involved.
I also recommend you not spend your last dime on a rental. Keep a reserve large enough to handle several months of vacancy, a major repair, or a tenant trashing the place AND it sits vacant for two months.
Cody. You could purchase a multi-family that you occupy and put about 3.5% down with an FHA loan.