1st Time Buyer Questions
Hey Everyone!
My name is John Gaal and I am interested in purchasing my first house within the next 3 months (currently working in Fort Worth, TX, but living in Burleson)! :) While I have been investing for a while now, real-estate is the one asset class I do not have. I'm interested in purchasing a house primarily to increase my net worth, but also to eventually use it to finance my future deals. I'm already working with a loan officer and agent, but I was hoping the hivemind here can help answer some additional questions:
1) Background: I really enjoy where I currently rent (living with a buddy in a single-family house paying $450/month). My initial plan was to use an FHA loan and BRRRR. With today's market, my loan officer is saying sellers are looking at cash, conventional loan, and then FHA loan offers (in that order). Additionally, the loan officer says my situation is better using a conventional first-time buyer loan rather than a FHA loan.
Question: since I no longer need to live in the first house to qualify for a loan, should I still search for a fixer-upper house, work on it, and then rent it out; or should I just buy a newly remodeled house and rent it out? What are your thoughts?
2) Contractors: I was planning on doing most of the rehab work myself or asking specific contractors to do specific work when needed (following Meet Kevin's real-estate plan). My agent recommends I find a general contractor (GC) before I purchase a house. Why not cut out the middle man and find specific contractors myself?
3) Contractors: There are a lot of apartment complexes being built around Burleson. If I pursue the GC option, should I contact the contractors working on those apartment complexes (signs I see displayed outside the construction zones, next to the street), or is there a better way to find reliable contractors (I've read the forums and I've found a few, but I've also read a few horror stories)
4) Remodel Budget: my initial plan was to use a hard-money lender for my rehab budget and after the work was complete, hopefully get a bigger appraisal on my house, repay the lender, and remove the mortgage insurance. With my situation (already stated above), do you believe it is better to purchase a remodeled home and rent (avoid the lender completely), or still go with the BRRRR method?
5) Tenants: When renting a house or apartment to a tenant, am I suppose to furnish the house (add chairs, tables, sofas, etc.) or can I rent it unfurnished? Will furnishing/unfurnishing the house affect the rental price?
I am sure I'm forgetting some questions, but until I remember them, I appreciate everyone reading this post and commenting below. Thank you for your help! :)