All Forum Posts by: Julien Jeannot

@Fatima Bassett

Yes, it is possible. The biggest challenge will be finding a property and one that you would like to lease in.

@Blaise Bevilacqua

Welcome!

I'd suggest house hacking the biggest multi family you can get your hands one.

1. Reduced Living Expenses: House hacking allows you to live for free or at a significantly reduced cost by having tenants contribute to your mortgage and other expenses. This can be a great way to save money and build equity.
2. Easier Financing: Obtaining financing for a property you plan to live in is often easier than financing an investment property. FHA (Federal Housing Administration) loans, for example, require a lower down payment compared to traditional investment property loans.
3. Owner-Occupied Financing: Owner-occupied properties generally have more favorable financing terms than non-owner-occupied properties. This can include lower interest rates and more lenient qualification criteria.
4. Learning Experience: Living in the property you're investing in provides a unique opportunity to learn about property management and real estate investing firsthand. You can gain valuable experience dealing with tenants, maintenance issues, and the overall operation of a rental property.
5. Tax Benefits: As a homeowner and landlord, you may be eligible for certain tax benefits. Consult with a tax professional to understand deductions related to mortgage interest, property taxes, and other expenses.
6. Potential for Faster Equity Buildup: With tenants helping to cover your mortgage, you can build equity in the property more quickly than if you were solely relying on your own income to pay the mortgage.
7. Flexibility for Future Investments: House hacking can be a stepping stone to future real estate investments. Once you've built up equity and gained experience, you may decide to move out and repeat the process with another property.
8. Mitigating Risk: Having multiple units can help mitigate the impact of vacancies. If one unit is empty, the income from the other units can help cover the expenses.
9. Property Management Skills: House hacking provides an opportunity to develop property management skills on a smaller scale. This experience can be valuable as you consider expanding your real estate portfolio.

@Gage Holmes

Welcome! I'd suggest looking into the house hacking strategy, preferably in a 2-4 unit property. Live in one of the units of a property while renting out the others to cover your mortgage and expenses. This approach is particularly attractive for first-time investors with limited funds, and it offers several advantages:

1. Reduced Living Expenses: House hacking allows you to live for free or at a significantly reduced cost by having tenants contribute to your mortgage and other expenses. This can be a great way to save money and build equity.
2. Easier Financing: Obtaining financing for a property you plan to live in is often easier than financing an investment property. FHA (Federal Housing Administration) loans, for example, require a lower down payment compared to traditional investment property loans.
3. Owner-Occupied Financing: Owner-occupied properties generally have more favorable financing terms than non-owner-occupied properties. This can include lower interest rates and more lenient qualification criteria.
4. Learning Experience: Living in the property you're investing in provides a unique opportunity to learn about property management and real estate investing firsthand. You can gain valuable experience dealing with tenants, maintenance issues, and the overall operation of a rental property.
5. Tax Benefits: As a homeowner and landlord, you may be eligible for certain tax benefits. Consult with a tax professional to understand deductions related to mortgage interest, property taxes, and other expenses.
6. Potential for Faster Equity Buildup: With tenants helping to cover your mortgage, you can build equity in the property more quickly than if you were solely relying on your own income to pay the mortgage.
7. Flexibility for Future Investments: House hacking can be a stepping stone to future real estate investments. Once you've built up equity and gained experience, you may decide to move out and repeat the process with another property.
8. Mitigating Risk: Having multiple units can help mitigate the impact of vacancies. If one unit is empty, the income from the other units can help cover the expenses.
9. Property Management Skills: House hacking provides an opportunity to develop property management skills on a smaller scale. This experience can be valuable as you consider expanding your real estate portfolio.

@Trisha Awate

Weclome! I admire the ambition. Here what I would recommend:

1. Educate Yourself:
   • Read books, articles, and blogs about real estate investing. There are many resources available that cover various aspects of the real estate market, investment strategies, and financing options.
   • Attend local real estate seminars, workshops, and networking events to learn from experienced investors.
2. Build a Strong Financial Foundation:
   • Focus on building good financial habits. Save money and establish a solid financial base.
   • Learn about budgeting, managing expenses, and the importance of saving for future investments.
3. Understand Different Investment Strategies:
   • Familiarize yourself with various real estate investment strategies, such as wholesaling, flipping, rental properties, and commercial real estate. Each strategy has its own risks and benefits.
4. Network and Build Relationships:
   • Connect with local real estate professionals, investors, and mentors. Attend real estate investment club meetings or join online forums to expand your network.
   • Building relationships with experienced individuals in the field can provide valuable insights and guidance.
5. Start Small:
   • Begin with smaller, more manageable investments. This could involve saving for a down payment on a property, partnering with others on a project, or exploring crowdfunding platforms.
6. Learn About Financing Options:
   • Understand the various financing options available for real estate investments. This includes traditional mortgages, private lenders, hard money loans, and creative financing methods.
7. Explore Real Estate Markets:
   • Research and analyze different real estate markets. Look for areas with potential for growth and positive cash flow.
   • Stay informed about local market trends and economic indicators that can impact real estate values.
8. Develop Analytical Skills:
   • Learn how to analyze real estate deals. This involves understanding property values, rental income potential, expenses, and overall return on investment (ROI).
9. Consider Real Estate Education Programs:
   • Some educational programs and courses are specifically designed for aspiring real estate investors. Consider enrolling in such programs to deepen your knowledge. No need for paid programs, plenty of free content out there.
10. Seek Guidance from Professionals:
    • Consult with real estate agents, financial advisors, and legal professionals to gain a comprehensive understanding of the legal and financial aspects of real estate investing.

Remember, real estate investing requires patience, diligence, and a willingness to learn from both successes and setbacks. Always conduct thorough research and due diligence before making any investment decisions.

@Kyle Moreau

Like all things, it depends. I recommend running the math over the life of the investment, or at least until you can pay off the HELOC.

Keep in mind you can lock the HELOC rates if you'd like to hedge interest rate increases.

First position for a HELOC?

Must be a new criteria or just a sign of times with credit constricting. All of my HELOCs are in second position. First position is with a different lender. All of them are non-owner occupied.

@Casby Bias

Play out the math. Personally, I'm looking to buy prior to the rates coming down.

@Trevor Harley

Networking in the local REIAs would be my first stop. Partnership at this price point can be tricky, if you have not already do so, reach out to a broker lender and see what you can afford.

The Fannie Mae guidelines for 2-4 multi units have been updated. You only need 5% down starting 11/18/23.

@Ryan Thomson

Solid post as always Ryan!

@Ben Miller

Ben,

VA loans are solid loans, do compare to other options. Depending on your situation, a conventional or FHA loan can be a better option. Have your lender explore the best option for your situation.

A note of caution, in a hot market such as Seattle, VA loans can be seen to weaken your offer due to the underwriting standards.