Any Investors Out There .....

Vancouver Real Estate Forum 6 Replies

Hello, I plan to come into contact with approximately 20K and I would like to invest in some way. A little about myself, I am a 56 y.o. who has looked into real estate for nearly 10 years. I have read multiple books, websites, articles, etc re: real estate investment, but NEVER took the plunge. I would love to partner with a more experienced investor inside/outside my area as they relate to these funds. Any answers, support, guidance and/or direction would be greatly appreciated!!!

Originally posted by @Christopher Jenkins :

Hello, I plan to come into contact with approximately 20K and I would like to invest in some way. A little about myself, I am a 56 y.o. who has looked into real estate for nearly 10 years. I have read multiple books, websites, articles, etc re: real estate investment, but NEVER took the plunge. I would love to partner with a more experienced investor inside/outside my area as they relate to these funds. Any answers, support, guidance and/or direction would be greatly appreciated!!!

 Good Day to you Christopher,

Fairly new myself, The way I got started is by house hacking my first property. It helps a lot because I get to save more capital for my next investment. So for your case maybe house hack on your first couple of properties as well so you can save more capital. Hope that helps.

-Rick

House hacking is when you buy a house and then rent out a section of your house to someone else. For example, if you buy a 2-3 bedroom house and then rent out one of the rooms to a friend or someone else. So, the rent payment will help you pay part of your mortgage payment. You are basically using someone else's money to make payment on your house. It will ease up your cash flow.

@Christopher Jenkins as @Sunny Chopra said, house hacking can be renting out one or more of the rooms in your residence (through things like AirBnB). Or, it can mean owning a duplex/triplex/quadplex, living in one unit and renting out the rest. 

Look for a single family home or a dupkex. Evaluate the cash flow use it for s down payment. Make sure your cap rate is 10 percent or more. I would look at bank repos or auction properties that are undervalued first.

I would use the 20K as a down payment on an FHA loan to buy a 2-4 unit property. Negotiate that the seller pays your closing costs, so that the full amount of the 20K can be used for the down payment if it is needed? You will live in one unit as owner occupied for a min. of 1 year before you can rent that unit out, and then you will collect rents on the other units. With 20K, you will be able to get a purchase of up to $571,428.00 or $571,428 X 3.5% = 20,000.

So go shopping to see if you can get a decent 1-4 unit at that price range or lower. Look to see what the rents are that are coming in off that property? The more rents, the more potential cash flow. Do a cash flow analysis on the property using the BP calculators. If you find a decent property, put it under contract and close on it as an owner occupied FHA purchase. Use the cash flow to build a nice nest egg to rinse and repeat down the road to another property. Keep building you portfolio that way.

Eventually you have enough passive income coming in that you can choose to keep working or live off part of your cash flows and invest the rest?

Kevin R., Guild Mortgage | [email protected] | 360‑269‑7359 | https://www.guildmortgage.com/get-started/officer/?officer=kevinromines | WA Lender # NMLS # 161554, WA Agent # 797155