Financing First House

[Nathan Stahlman]

Hello everyone! My name is Nate and I am a Sophmore in college (20 years old) and I am studying business. I am writing this post because I have been listening to the bigger pockets podcast for a while now and I want to buy a house by my university and rent the rooms out while I live in it. I am finally serious about making moves and getting a house. My roommate and I have been friends since high school and we want to split this house since we both do not have much money, but we want to invest in real estate. We pay $475 each to live in an apartment pretty close to campus (I live in Northeast Ohio). 

The problem is neither of us has a good income during school and I have good credit, but I have only had a credit score for a few months so we would probably need a cosign on a loan. My roommate's mom might help us out and cosign since she wants us to get a house. A down payment is a problem too because neither of us has enough to put money down on a house. We are going to start looking for possible hard money lenders but we want to weigh all of our options. If we got a house with tenants or a tenant in it already then the monthly payment would not be an issue and we could start (maybe) paying off the lender if we have any cashflow. We would still have to pay for our apartment rent since the contract isn't up until July. We probably can not get an FHA loan because we technically wouldn't be living there, but this would be a nice option for a small down payment.

 We were thinking about land contract because we might not need a big down payment but we are stuck in our apartment rent until July and we would not be able to afford a house payment and our rent. The only way this would work is if somehow we found the right house in June, July or August, and the seller would agree to land contract. 

On the other hand, my roommate and I are starting a small corporate cleaning gig and we have a client that we will start working with in August who is going to pay us really good money for part-time work. We both work over 50 hours a week during the summer and we make decent money so by the time the fall semester starts we have some money. On top of my regular part-time job I have during the school year. So we would have enough money for a down payment especially if we put our money together. The problem is that we have to renew our apartment rent here soon or we will have to leave and go somewhere else more expensive.

A family friend is a mortgage broker and I am meeting with him soon I want to hear what he has to say.

I want to hear some of your opinions on how to finance or what I should do. Should I just wait until next year when we have money then try to sublease our next year's apartment? We might be able to not renew our rent and just commute to school (45 min drive) next year until we find a house as well. We were also gonna put the house under our business LLC so that we can get tax write-offs and we would be more protected if something went wrong. I think that is how that would work someone correct me if I am wrong.

Thanks for anyone who read this I appreciate your time.