Directional advice for a noob.

5 Replies

Wow!

The sheer volume of information on bigger pockets is both exciting and overwhelming.  I think I've been reading for days, and barely scratched the surface.  It sorta feels like I fell down Alice's rabbit hole, but in a good way.


Thank you, to Allison, the emails every couple of days with links to blog posts, are terrific.  It points me in the direction of interesting, informative articles that I could easily miss while wandering around here, getting distracted by all the different posts.

I'm new to this. I found bigger pockets by googling trying to find information on buying a quad using an FHA mortgage. I was, originally, looking for some security in the Denver market, where my rent is going up considerably faster than my paycheck, and with a disabled husband, limited means to generate additional income, the future was looking scary. You guys have given me a vision of what may be light at the end of the tunnel.

I have two possible scenarios for my FHA eligibility and I'm torn.

I have a lease option on my current residence, (townhome in Aurora).  I've been told that current market value is $175K.  My lease option is for $155K.  I am considering updating the townhouse, cosmetically, investing some cash (about $5K to play with) and a lot of sweat equity over the next 9 months, to see if I could get the value up closer to $200K, and then buy/sell and have some money for a step up.  Doing the remodeling while renting is a bit of a risk, but I'm currently paying $500 less monthly than I will be after I close so I'm thinking that might be justifiable.  My landlord is good with this. 

The other option, is to jump in with both feet, and see if I can find a triplex or quad, that I can buy, live in one, and use the others to help pay the mortgage. I'm pretty comfortable with not having the nicest, or being in the best neighborhood.  Then, in a year or two, refinance, and buy another.  Buying a quad in the front range is scary for a starting point, so I've looked at Phoenix, where the cost of a 4 plex is considerably less intimidating, but there are negatives.  I really don't want to move, and while my job could be done remotely, my grandkids are here and remote hugs just don't cut it!

I'm open to anything. Ideas, suggestions, tell me I'm crazy to be thinking about this at my age...but my IRA and profit from our home went to pay massive medical bills for a micro preemie granddaughter, so now I find myself at 60 with no retirement, no security.


I'd love to hear your thoughts on a direction?

@Terre B. YOU ARE NOT CRAZY OR TOO OLD! You have the prefect idea. What BP would call your plan is a house hack. You will live in one unit using the benefits provided from the FHA loan and rent out the others. This is probably one of the best ways to get started in multi-family investing. Plus if you use the FHA 203k loan you can finance the repairs along with the purchase for only 3.5% down! I would find a fixer upper and get this going but take your time to make sure it is a good deal. Bring in a multi family agent and scourer for a deal. I wish you luck and if there is anything I can do to help, let me or the BP community know.

I personally would not try to flip the condo you're in now if it will take you 9 months. A LOT can happen in that time and if the market goes down, you're probably stuck there for a long time. Buying a quad is a much safer investment IMO because even if the value goes down, you don't care because you have rental income and you're probably going to hold onto it forever. Good luck with whichever path you choose!

Thank you Bryan.  It wouldn't necessarily "take" me 9 months, that is the end of the term for the lease option, and end of my low rent lease.   I am pretty confident that the market in Denver won'd tank, it's going up 10% per year for the last 5-6, and shows no signs of not continuing that trend. 

I'm leaning toward the quad, myself, but my husband is pushing for the townhouse. I can only do one FHA, with a down payment grant, so I have to choose. Kind of hoping you all can help settle the "domestic dispute" with arguements that will either convince me he is right, or that I can use to convince him he is wrong!

@Terre B. hello and welcome to BiggerPockets!

First, utilize all the free resources on here to gain valuable knowledge from experienced real estate investors. Listen to the podcasts. Read the blogs and articles. Take notes.

Second, network with other investors on here. You're already off to a great start. Keep the momentum going. The experienced investors on here will make sure that your deal is done right.

Finally, consider joining your local real estate investor's club. It is there you can "rub elbows" with investors in your area who are actually "out in the field" doing real estate deals.

We are happy to help in any way we can. You are not alone in your real estate ambition.

Congratulations once again and I wish you the best in your real estate investment career.

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