All Forum Posts by: Ricardo S.

@Aaron Montague

Thank you! I really appreciate it.

That will be one of my goals for 2016

Hey BP!,

Since graduating I found myself anxious to get into real estate asap! I keep reading all these success stores and I feel I am ready but the only thing holding me back is thinking should I get out of debt first or buy a property?

Here are my finances;

Age 23. 

Career: Electrical Engineer (straight out of school) July 2015

Salary :42k + OT= ~45K 

Debts:  Chase credit card $4500 (15% interest), Citi credit card $4600(14% interest). 

Total $9,100. Monthly payment $250~

Expenses: (personal) -$100/monthly + credit cards = $350/monthly

I live with my mom and I pay some bills and "rent" in order to stay there. = $850/monthly

Total Expenses= $1200/monthly

Total Monthly income before tax: $3500

Property location: Newark NJ 

3-4 unit multifamily

Price range 50k-90k 

Loan Program FHA 203k

Rehab budget: price+ rehab= $150K (Max amount)

Estimated taxes $6500 

Estimated insurance $1200

Estimated ARV: 200k (conservative)

Estimated Rents for the neighborhood I want to invest:

1BM= $700

2BR=$1000

3BM=$1300

Downpayment: 3.5%

Credit score : 670 

After 1 year I will refinance to a conventional loan.

Even with the debt that I have. My debt to income ratio is still low enough to be approved for a FHA loan. The bills and money I pay to my mom will go away once I move out. If a property contract is accepted I will ask for a 6% seller concession for closing costs ( I will increase accepted offer price to offset the 6% concession so the seller will agree)

What are your thoughts?

Welcome!

If you are a carpenter you should make decent money and you should have connections with contractors. 

Spark up conversations during work or when you're on lunch and see how far that will get you. From my experience a good majority of investors are contractors or people who work in the construction field.

Your goal should be to be friends with people who do rehab work on the side on flips renovations, that way you can work with them to 1 Get more income and 2 Meet directly with the investor and form a relationship.

Good luck man!

@Taylor K.

A decent credit score doesn't guarantee a mortgage. They also look at your debt to income ratio. 

Since you have 18k in loans and 8k in savings. Throw the 8k at your debt. That will leave 10k. You can easily pay off the remaining in 5 months or so making 50k.

Then save up for a downpayment and closing costs. You can have a property by the end of 2016.

Your welcome.

I understand your point.

Big banks and small banks both serve different purposes based on the reach of the services they provide. For examples, The big banks all have mobile apps, country wide branches and superior 24hr customer service. Where as small banks have localized management and quick turn around times for mortgages. 

My point is you don't have to choose one. You can use both. 

@Rob Beland

In order to make money on something you need to understand how people loose money!

try reading RICH DAD POOR DAD. That will introduce you to the real estate world.

The most important thing is to find a place you can afford that meets the 2% rule.

@Daniel Miller

Sounds good man. So whats your specific goals just for 2016?

Hmm. I think the best option would be one that involves the least amount of work for the tenants. Probably paying it online somehow but will have to compare the fees.

 Try joining your local real estate club in your area.