I currently manage 3 Airbnb properties and I have the potential to thrive in this market. I do everything including meeting up with the renter if necessary, cleaning, communication and stocking. After 2 years of doing this, I want to purchase my own duplex or triplex and rent them for Airbnb and live in one unit. I want to do this with FHA 3% down and get a decent off market deal in Philadelphia. I would consider a fix and flip as well. Has anyone done this with very little money to start with? In my current role as a veterinary technician, I do not make much money and Airbnb managing has the potential to replace my job. I have only saved 10k thus far but I feel it's time to come up with a plan. I would like someone give me advice on this idea. What do you all think?
You can do it. Will be scary because after purchasing and furnishing the unit cash will be tight. Using a 3.5% down payment plus 2% in closing costs means you'll be looking to purchase an asset in the 200k range. with very little cash reserves left. first payments on a mortgage are due typically 2 months after closing so if you move into the unit right away and get them rented you'll be able to build some cash reserves in the period between when you close and the first payment comes due. You'll be really uncomfortable and might be a bit scary. but you can do it. Be sure to calculate the following expenses when doing your numbers : Insurance, vacancy, maintenance, mortgage, management, taxes, utilities. Accounting for these items will get you pretty close to the cash out of pocket you'll need each month. a lot of people will tell you to save more and have a bigger cash cushion. This is good advice. then again... scared money etc etc. merry christmas :)
Yes! Fha is the simple way to get in. You should completely consider it to get started. I suggest you don't overbuy and you have some reserves in place after the purchase.
Keep in mind a lot of cities/county are cracking down on air b n b hosts, make sure your laws align with your goal, but if they do change pick a location that is good for long term rentals.
You got this. Pm me if you have house hacking questions
Owning your own properties is the way to build equity and wealth. Managing other people's property is just a job and you might have to legally be a licensed Property Manager. I don't know the laws in your area.
Congrats on looking to become a Real Estate Investor!
In the right market, $9500 will buy a 3 bedroom house with CH/A that might need about $1000 worth of additional repairs. I know this guy that's been doing exactly that. Buying bank foreclosures and renting them out to refinery ruffians. Motel room with 2 beds = $400/week. Furnished house with 3 bedrooms = $600/week. The down side is dealing with dead bodies, intruders, rattlesnakes, overdoses and other miscellaneous mayhem.
@Victor Steffen Thank you for this response! I am scared, but growth and comfort do not coexist. It will be beneficial for me to play around with excel and create a mock expenditure. I appreciate this solid advice
@Julio Garcia I know Philadelphia is Airbnb friendly but only for 180 days of the year. That is roughly 50% occupancy per year where top performers rent out 75% a year. I do not want a cap to the potential growth so I may have to reconsider location. Thank you for bringing this up!
Thank you @John Underwood !
@Paul Sandhu I would like to avoid this scenario at all costs! Dead bodies > rattle snakes
@Emily K. FHA is a great way to start - if you want to put even less money down, then FHA with DPA will help. You would only need money for closing and inspections but it's limited to single family residences unlike only doing the FHA without DPA where you can go up to a fourplex. And if you don't mind doing repairs then you can look into an FHA 203k where you are financed more money for repairs