Ready to start my first rental but buying a residential

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Ready to start my first rental but buying a residential

Mo Muigai
Rental Property Investor 路 Minneapolis, MN 路 Member since 2019 路 85 posts 路 22 votes

I鈥檓 really pumped and ready to get a cheap single family or small multi family rental. However we are buying our residential at the same time. Obviously no massive cash to put down for both so gotta do few months apart. Any tips? No multi family properties to house hack in the area馃槱

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Theresa HarrisPro Member
Member since 2019 路 15k+ posts 路 11k+ votes
7y

When buying your primary residence, keep the idea of turning it into a rental later on.  For your first rental, get something in a solid area.  

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  • Theresa HarrisPro Member
    Member since 2019 路 15k+ posts 路 11k+ votes
    7y

    When buying your primary residence, keep the idea of turning it into a rental later on.  For your first rental, get something in a solid area.  

    4Reply
  • Shera Gregory
    Investor 路 Richmond, VA 路 Member since 2013 路 347 posts 路 191 votes
    7y

    If you aren't doing this already, go to one of the local real estate meetups. Here's one that I found in the Minneapolis area just doing the search on meetup.com ..  MAREI

    Then let people know what you are looking for. You may be able to find a deal where you can take over the existing loan with a small amount down. Even if you go a more conventional route for purchase and financing it will be beneficial to network with other investors in your area.

    1Reply
  • Amber Gonion
    Real Estate Broker 路 Hugo, MN 路 Member since 2016 路 688 posts 路 596 votes
    7y

    @Mo Muigai you have a bunch of directions to go. Most investors make the mistake of never getting into the game. Sure sometimes things can be slow to start, but in 5 years, 10 years, very few are sorry they jumped in.

    2Reply
  • Calvin OzanickBusiness Member
    Property Manager 路 Janesville, WI 路 Member since 2017 路 708 posts 路 297 votes
    7y

    I would recommend asking your lender about a down payment assistance program. I am looking into getting into my first primary residence with almost no money down. Should this happen, you could use your down payment money to purchase the rental property. 

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    1Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent 路 Austin, TX 路 Member since 2015 路 5k+ posts 路 3k+ votes
    7y

    @Mo Muigai there are TONS of properties to house hack in MSP. What is getting in your way?

    [email protected]512-888-9122
    The Moorhead Team5142 Reviews
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  • Jason Martinez
    Real Estate Agent 路 Cypress, CA 路 Member since 2018 路 88 posts 路 41 votes
    7y

    Hi @Mo Muigai,

    Sounds like you are stressing out on buying two properties like you are about to marry two different girls and you don't want them to find out about the other. 

    Take a deep breath and ask yourself.. 

    - Can I get an FHA loan for a low down payment? This will help you save for your next property.

    - Can you purchase your primary house and house hack by using Airbnb or rent to a longer term tenant? This would help your DTI (Debt to Income Ratio) when purchasing your next investment property.

    - Can I afford a new car, phone, laptop etc...? NO! Your lender will tell you the same, but do not go out and buy a new car or something materialistic to prevent you from getting pre qualified for your next property. 

    1Reply
  • Tim SwierczekPro Member
    Lender 路 White Bear Township, MN 路 Member since 2016 路 1k+ posts 路 1k+ votes
    7y

    @Mo Muigai kill two birds with one stone, house hack first then look at a non-owner occupied property.

    1Reply
  • Mo Muigai
    OP
    Rental Property Investor 路 Minneapolis, MN 路 Member since 2019 路 85 posts 路 22 votes
    7y

    @Jordan Moorhead I am in Mankato area, an hour south of Minneapolis. Not much options down here

    0Reply
  • Mo Muigai
    OP
    Rental Property Investor 路 Minneapolis, MN 路 Member since 2019 路 85 posts 路 22 votes
    7y

    @Jason Martinez no HFA since isn鈥檛 my first home. No renting out we have a 1 year old. No plan to buy any material stuff anytime soon

    1Reply
  • Mo Muigai
    OP
    Rental Property Investor 路 Minneapolis, MN 路 Member since 2019 路 85 posts 路 22 votes
    7y

    @Tim Swierczek can鈥檛 house hack with a 1 year old and a spouse 馃槂

    0Reply
  • Jason Martinez
    Real Estate Agent 路 Cypress, CA 路 Member since 2018 路 88 posts 路 41 votes
    7y
    Originally posted by @Mo Muigai:

    @Jason Martinez no HFA since isn鈥檛 my first home. No renting out we have a 1 year old. No plan to buy any material stuff anytime soon

    There are no requirements that you must be a first time home buyer in order to qualify. This could be your first home or your 10th home I am pretty sure you can use FHA, but confirm this with your lender as well.

    0Reply
  • Mo Muigai
    OP
    Rental Property Investor 路 Minneapolis, MN 路 Member since 2019 路 85 posts 路 22 votes
    7y

    @Jason Martinez I didn鈥檛 know that, thanks for clarifying. If I have used it in the past and sold the home, can I qualify again? That鈥檇 be awesome 馃憦馃従

    0Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent 路 Austin, TX 路 Member since 2015 路 5k+ posts 路 3k+ votes
    7y

    @Mo Muigai you need to reach out to a good lender, like @Tim Swierczek. You absolutely can use FHA when you already own a home. I see some pretty good looking places currently listed in Mankato. I don't work down there personally but reach out on here and I'm sure you can find an investor friendly agent.

    [email protected]512-888-9122
    The Moorhead Team5142 Reviews
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    2Reply
  • Jason Martinez
    Real Estate Agent 路 Cypress, CA 路 Member since 2018 路 88 posts 路 41 votes
    7y

    As @Jordan Moorhead mentioned. Yes! You only need to live in the FHA property for 1 year and you can move onto the next.

    1Reply
  • Mo Muigai
    OP
    Rental Property Investor 路 Minneapolis, MN 路 Member since 2019 路 85 posts 路 22 votes
    7y

    @Jordan Moorhead

    Will do so. Thanks for the insight

    0Reply
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