All Forum Posts by: Catherine P Jassey

Hi Catherine,

Financing as an owner occupant will be your best bet to get the best terms of financing for you. There have been some recent guideline changes that are really benefiting live in investors. Particularly the down payment requirement dropping from 15-25% down for conventional financing to a new minimum of 5% down. FHA is also an option with a 3.5% minimum down payment. There's also a 0% down FHA option as well on 1-2 unit properties.

 Find a deal where you can create value. Below market rents, upgrades to the property, etc. And make sure the numbers work out that the deal is cashflow positive once you move out and fill that unit with a tenant.

Hi Cahterine,

If you haven't done so, I would talk with a lender about owner occupied 1-4 unit financing options and see what you qualify for.  That would let you get started as an owner with full control of the property (no partners).  If needed, friends/family typically still can help gift you down payment funds (can pay them back with interest after closing, but in my experience the lender probably will want it to be noted as a gift for underwriting).  Owner occupying a rental property is just a great way to get started as your tenants subsidize your mortgage and property expenses and you'll get the lowest long term debt interest rates as an owner occupant.  

Therefore, I would start with the financing knowledge of what you could get approved for and how much you need to save up for a down payment as that may be closer than you think.

I'm in Madison as well, and as you know it remains a high demand housing market (prices continue to increase, but rents have been as well).

Investing requires 3 things and they are fortunatley interchangeble: time, money & energy. If you don't have money you can substitute with time and energy. This sounds great until you think through how much of your time and energy you need to bring in exchange for let's say $50,000. 

You might guess, it's quite a lot. 

And while it's not impossible to do, you may burn out frustrated, before your first success. I know a young investor in Milwaukee who generated a full downpayment by flipping couches. The cool thing about this is that you get to train the exact same (people and negotiation) skills you need later for finding deals. Almost no capital needed, quick turn around and success comes quick, which will motivate and inspire you to do more and bigger things.