Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
Hello BP community-
I am currently looking to buy my first multifamily property to house hack.
Heres a little breakdown of my situation..
I currently make $15 an hour working a part time job while attending college to become a nurse. I have a young daughter who is 5 so I am limited right now for areas to invest in because I would prefer a above average school for her to attend to. Right now I have 30k to invest, I would like to purchase a multi family triplex for no more than $200,0000. My credit score is 748 as of right now.
I have feeling that most banks wont approve me for a loan due to my income. I am currently gathering paperwork to send to my bank for pre approval. Lets say I don't get pre approved because of my income. What do you suggest I do?
I have no family support so I am currently renting using money from my inheritance which obviously is just wasting away. I am trying to invest it ASAP into property before I graduate school.
When will you be done with school? What do you expect will be your income once you're done? You are obviously limited with bank financing, because you're working part time. Maybe you could get owner financing? You could potentially get owner financing interest only payments, and then refinance after your income increases when you are done with school. But that is risky and you need to find an excellent deal. Conventional wisdom is "if you can't afford to keep it vacant for 6 months, then you can't afford it". But if you are dead set on buying something now, that could be a way to go.
Contractor · Greenwood, IN · Member since 2014 · 200 posts · 33 votes
9y
@Mathew Weissman Sounds like you are a go getter. If I was you, you might keep banking as much money as possible until you get done with school. It will be easier to handle the obstacles that come wit real estate and you won't have to worry about your daughter. I have 2 girls and I do this around them, I understand what your trying to do. Keep gathering knowledge and maybe a partner will pop up and you will be able to jump earlier. But there is only 24 hrs in the day and when u ad something, something else gives. Just my 2 cents, but if I was you I would keep learning about real estate, finish school and then start investing. That way u can devote the time you need for it and don't have to worry about the financial problems that come with homes and time. Not trying to down the idea, but I think some people often over look how much time it really takes to win. Best of luck!
Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
9y
@Pete Perez I have 2 years left in school and then my income increases significantly to $40-$50 hourly. Right now I think owner financing is very risky only because I have another 2 years left and finding amazing deals in my area is not easy. I will probably have to eat the 30k I will lose in the next two years in rent and then start searching. The good news to that is I will have tons of knowledge and a good team established for when I am ready to make my first deal.
Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
9y
@Chris Wood Thank you for your reply Chris. Yes I agree with you that with a higher earned income I can overcome all the obstacles of real estate financing a lot easier. A partner would be great, unfortunately everyone my age in my area is set out to get a degree and work for a paycheck the rest of their lives..not my plan! I will finish school and continue to educate myself in the meantime. By the way, do you have any good books to recommend reading? I have read so far "Millionarie Real Estate Investor" by Gary Keller, "Build A Rental Property Empire" by Mark Ferguson, and "Rich Dad Poor Dad" by Robert Kiyosaki
Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
9y
@Todd Douglas Well I live in Morris county, NJ. Currently live in Parsippany which doesn't have many multi families since it has a very large majority of garden apartments. I was looking in West Orange, NJ which has an above average school and right next to Seton Hall University.
Contractor · Greenwood, IN · Member since 2014 · 200 posts · 33 votes
9y
@Mathew Weissman Love your plan. You will be successful no doubt! Check out Millionaire Next Door. Great book! Real Estate has many great books, but also try to learn your strengths and weaknesses. These are also part of the tools of success.
Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
9y
@Chris Wood Thank you! I will definitely add that book to my list of books to read. I will take your tip and sit down and review my strengths and weaknesses to use them as tools to become successful.
You have been a great help in not only motivating me but also giving great advice to use in my RE success!
Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
9y
@Chris Wood Thank you! I will definitely add that book to my list of books to read. I will take your tip and sit down and review my strengths and weaknesses to use them as tools to become successful.
You have been a great help in not only motivating me but also giving great advice to use in my RE success!
Investor · Hawaiian Gardens, CA · Member since 2015 · 308 posts · 386 votes
9y
you need to speak with a few lenders to see how much you're pre-qualified for. If you aren't pre-qualified for enough, get a family member or close friend to co-sign with you if possible. If your debt to income will allow it, go for the tri-plex, probably will need to go FHA loan. GL
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
Mathew Weissman This is maybe a boring/prudent question but what reserves do you have outside of the money you've saved for investing? Could you afford to replace an HVAC system if it unexpectedly broke the 2nd month you owned the property? At $15/hour with a child I'm guessing you're not saving a ton of money on a monthly basis so I would hope you have substantial reserves before investing. Everything always goes right "on paper" but life doesn't work that way. You don't want an unexpected expense to mean you cant pay the mortgage.
Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
9y
@Derrick Dill I am in the process for pre approval. I am awaiting an answer. Unfortunately I don't have a family member that will co-sign so that is not an option. We will see what happens but I would probably have to wait until I have a increased earned income.
Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
9y
@Andrew Johnson Yes I have thought about cash reserve and the 30k I have to invest is only a fraction of my total inheritance. You are correct about not saving a lot on $15 an hour(saving $300 a month living very modestly). I understand about cash reserve to have for all your "unexpected" issues with owning property such as expenses, vacancy, capex, etc. I appreciate your advice and this was not a boring/prudent question. Thank you.
Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
9y
@John Smith I am in New Jersey and a nurse with a bachelors degree with no experience will make between $35-$40 in a med surge unit. Nurses with prior medical experience and nurses working with high acuity patients(ICU,CTICU,BICU etc.) make between $40-$50. My friend recently graduated from Montclair State U with a bachelors degree, no prior experience (worked as a waitress) and is starting at $38 an hour in the Oncology department. I have been a Medical Assistant for 5 years and have worked with the same hospital for 2 years. Looking to work in Cardiac ICU.
First off, congrats on thinking ahead, thinking differently and getting yourself set up long-term.
Have you looked into some of the government programs that assist low-income home buyers? NJ has a program called "Smart Start" and several others that may work for you. We have done GC work for several buyers in this and other programs and it really helps folks get started.
I would recommend "The One Thing" by Gary Keller, great book.
Parsippany, NJ · Member since 2017 · 36 posts · 10 votes
9y
@Vincent Priore I will definitely research and get educated on programs that the government provides for low-income home buyers. Thank you for the book recommendation as well; Gary Keller writes some great books. Thanks you!
Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
9y
@Mathew Weissman haha nice! I read 46 business/real estate books over the last year and a half and still feel there's so much still to learn not just about both topics but on becoming who I need to be to succeed in both fields. Keep reading but don't let a desire for more knowledge prevent you from getting going! There comes a point where your DESIRE for more knowledge exceeds your NEED for it and it becomes time to get your feet wet and get some knowledge from experience.