Passaic, NJ · Member since 2017 · 5 posts · 0 votes
Hi all!
I was almost about to complete the American Dream (actually have 2 leases and some credit cards) and just the house was pending.
Then, I was feeling sad and demotivated about the life I’m living versus the life that I want to live and I started googling: How to make money from home and its derivatives…that’s when I found this useful website!
I don’t want to be tiring, I need your advices because when I was looking for homes to move in I got pre-approved for a $100k loan (I’ve save $10k but don’t want to expend it in Down payment *yes, I bought the book*) . Passaic / Newark / Paterson NJ area are expensive and taxes are high, but anyway I think I could use this first loan to invest in a house and rent it having a little or big profit to start with something.
Investor · Portsmouth, VA · Member since 2016 · 289 posts · 107 votes
9y
There are ways to buy a house with no money down. For example in VA i used the VHDA program. Not sure whats available in NJ. A lot of investors start with a duplex/triplex and rent out the other portions of the house for rental income. I am assuming you would need to live in the property.
You could also purchase a "fixer upper" and use the FHA rehab loan. There are many different possibilities. Good Luck!
Investor · Portsmouth, VA · Member since 2016 · 289 posts · 107 votes
9y
There are ways to buy a house with no money down. For example in VA i used the VHDA program. Not sure whats available in NJ. A lot of investors start with a duplex/triplex and rent out the other portions of the house for rental income. I am assuming you would need to live in the property.
You could also purchase a "fixer upper" and use the FHA rehab loan. There are many different possibilities. Good Luck!
You were pre-approved for that amount, but it assumes your current level of income and suitable collateral - a home worth at least that much in resale value or maybe even 1.25 times that amount.
See what you can get on a "signature" loan - unsecured, possibly an open revolving credit line. Take THOSE funds out, season them in a personal savings account - I'm thinking 90 days, minimum, but possibly longer - THEN see what you can do with those funds.
In the meantime - while the money is "seasoning" - learn how to attract and engage private lenders.
There are ways to buy a house with no money down. For example in VA i used the VHDA program. Not sure whats available in NJ. A lot of investors start with a duplex/triplex and rent out the other portions of the house for rental income. I am assuming you would need to live in the property.
You could also purchase a "fixer upper" and use the FHA rehab loan. There are many different possibilities. Good Luck!
Hi Tiffany!
Many thanks. In NJ we have FHA but it is only applicable to single-family houses. That is why I was thinking to buy one within the $100k and rent it. Also I was thinking about a 2 bed apartment.
I will research about the FHA rehab loan as well. Is it difficult to get the following loans approved. I am just asking because they pre approved me for less money since I have 2 cars under my name, I was guessing then how would I get more loans after this one.
Investor · Port St Lucie, FL · Member since 2015 · 37 posts · 14 votes
9y
Hi @Virginia F. I wish you luck on your journey, and welcome to Biggerpockets. I wanted to chime in that I live in NJ and can confirm in fact that an FHA loan can be used on up to 4-Familiy Residential Property. That is what I did. See below blog article and check out others like it.
Investor · Portsmouth, VA · Member since 2016 · 289 posts · 107 votes
9y
@Virginia F. FHA i believe is a bit easier to qualify for than a conventional loan. You will have to pay PMI however. Most the time they only require 3.5% down.
You were pre-approved for that amount, but it assumes your current level of income and suitable collateral - a home worth at least that much in resale value or maybe even 1.25 times that amount.
See what you can get on a "signature" loan - unsecured, possibly an open revolving credit line. Take THOSE funds out, season them in a personal savings account - I'm thinking 90 days, minimum, but possibly longer - THEN see what you can do with those funds.
In the meantime - while the money is "seasoning" - learn how to attract and engage private lenders.
Good Morning David.
Many thanks for your answer, I am still researching about your suggestions, I am not familiar with the real estate business at all, I just started seeking for help and recommendations. I really appreciate your response.
Investor · Paterson, NJ · Member since 2015 · 71 posts · 22 votes
9y
talk to your lender let them know you're interested In 2 family or 3/4. With the extra income you could qualify for a higher mortgage. So ultimately more buying power by using the rental income.
Hi @Virginia F. I wish you luck on your journey, and welcome to Biggerpockets. I wanted to chime in that I live in NJ and can confirm in fact that an FHA loan can be used on up to 4-Familiy Residential Property. That is what I did. See below blog article and check out others like it.
Newark, NJ · Member since 2015 · 162 posts · 102 votes
9y
You may also want to look into loan programs by some of the big banks (e.g., Chase, Citibank, etc.) who, after years of discrimination towards first time homebuyers in the very cities you mention, have been forced to offer better terms and conditions. And yes, like everyone has said here, a you should be able to finance a 1-4 family home through FHA. That your mortgage broker/lender got this wrong, or even that he/she left you with the wrong impression, is reason enough to drop them.