All Forum Posts by: Matt Hintzke

@Jenna Estefan I think I would have to owner-occupy the property for anything around this area. When I search realtor.com or redfin.com for these properties the cheapest ones I can find that are in the area are 500k+ for a duplex. That would mean a 100K down deposit which is no where near possible for me (I don't get how thats possible for most families these days). With that said the FHA seems the only way to go if I were to purchase a multi-family home. I will look into the WA State Bond to see if I can get any other type of help getting that down. I have never seen a house, nevermind a duplex, under 400K in this area. I imagine the market is much cheaper in Burlington which is why it seams feasible in that area.

Thanks for the tips!

Thank you all for your advice!

@Account Closed I'm actually not sure about that IRA. I have it via my 401k and am not sure if it is "self-directed". I will try to look into that. Thanks!

@Elo Xen Oh wow! I am not sure what I was reading at the time that made me think that (maybe I read that the rate was just lower, possibly FHA loan?), but it looks like I will have to do some more research into that or talk to a lender. I would love to talk to someone that you would recommend! I will take all the advice I can get especially about this type of market.

@John Thedford Thanks for the tips! One of the things I know I should be doing, but don't do well enough is budget my money officially which would help me cut out many things that I know I don't need (Mac 'n Jacks :D ).  I can see how random expensive could really get you into trouble when you start owning more and more properties.

Thank you both!

@Lane Kawaoka Thank you for the advice! @Brad B. Thank you very much!  I have thought about when I would want to get into the market in any way I can, but have a few realizations:

1) Although no one can predict the market, I have read that there is pretty good evidence pointing towards an 18 year cycle, 2007 being the prior tipping point. This would estimate the next recession around 2025, give or take a few years. Now I would bank on this, but that would make me think that this point in the cycle, it could be difficult to get cash-flow out of properties in the coming years.

2) At some point I expect to purchase my own house and am not sure if I should attempt to get into the market for investing before or after that time.  I just find it hard to keep renting whilst gaining no equity as you said.

3) I must have been wrong in this assumption due to the posts by previous users, but I thought that the owner-occupancy rules on many mortgage loans limited me from purchasing in a cheaper market and immediately be able to rent it out.  Is this only at a certain down payment percentage or something? Could someone explain how that works if I wanted to go outside the Seattle market?

Thanks!

@Aaron Howell @Elo Xen First of all, thank you for the tips and guidance! I really appreciate it.  I haven't looked into getting a Real Estate license yet, but if you think it would be best for my education then it could be an option.  I have looked into owning rental single-family and multi-family homes in other markets like Spokane, Wa which are much cheaper, but I then read about the Owner-Occupancy rules on most mortgage loans that state that you need to live in the residence for at least a year before it can be used as a rental property. Do you guys typically get loans that do that have that restriction? Pardon my naivety :)

Hi all,

My name is Matt, I am 25, and looking to begin my journey to financial freedom. If there is something I see the most regarding building wealth for retirement, it is to start early. So that is exactly what I am trying to do. I graduated school in 2014 with a B.S. in Computer Science and immediately started working at a startup in Seattle, Wa. I have been working there since and I love it, however, just like most jobs there still seems to be a financial wall that I will hit in the next few years limiting my total earnings. Now don't get me wrong, Comp. Sci. and software engineering is a great career that is on the rise and salaries are still very fair, however, Seattle is becoming the next San Fran area with the rate the tech industry is growing and this has caused real estate and the rest of our economy to rise.

I have read many of the blog posts and guides on this site about beginning your real estate career, however, whenever I attempt to take the knowledge to a real-life scenario I can never understand how one can start out in real-estate without capitol. Many examples I have read talk about purchasing your first multi-family home at around 200-400K and putting down just 25-30K. However, in Seattle, Wa, I cannot find a single duplex or multi-family home for less than 600K and a 100K down deposit. The market is just much too high to find anything in a price range that I can even come close to.

As a recent grad, I have 60K+ in student loans, a 20K car loan, and am currently renting @ about $2,100/month (split with girlfriend makes my share $1,050). On top of that, I put away 7% into a 401K, and 5% into a general savings account. As nice as my salary seems (in the 80-85K area), with all these other debts, I find it difficult to plan for a future in real estate.

I feel as if I am caught between a rock and hard place because I feel like it could take years before I save enough cash to make a down deposit on such an investment, and in that time I assume marriage, kids, personal residency will all take a toll on my finances just further burying myself and impeding my ability to enter the market. By the time I end up saving enough it will be too late and I will have wasted many valuable years that could have gone towards compounding my money.

So basically here are my questions:

1) Does anyone have any tips on starting out in a bull market with high debt and low capital?

2) In this market, does it make sense to begin my investing with real-estate or should I begin somewhere else?

3) I have taken in a lot of information about investment and real-estate in general and I am not sure where I should be... i.e. I don't have enough to enter the market, so do I just save and save until I do or do I put that money into 401k, IRAs, MFs? The last thing I want to do is let thousands of dollars just sit in a stagnant savings account that won't do anything for me, but I am hesitant to just dump my money into the market or a retirement account.

Any and all guidance is very much appreciated! I am not looking for a mentor, but rather some tips or real-life experience on the matter and how some others might go about entering real-estate in this scenario?

Thank you,

Matt