I just graduated college (debt free), I'm in graduate school and have a full time, good paying job. I've moved back home with my parents and everyone (friends, parents, girlfriend) keep telling me to look for apartments first. I keep discussing using FHA loans to get a multifamily and make some money, but
I just graduated college (debt free), I'm in graduate school and have a full time, good paying job. I've moved back home with my parents and everyone (friends, parents, girlfriend) keep telling me to look for apartments first. I keep discussing using FHA loans to get a multifamily and make some money, but everyone keeps telling me "Wait! You're still so young, you have plenty of time to do that." Am I being stubborn? Or am I right to pursue this?
Jake Rafferty: You are never to young to invest in real estate. It is better to get into any field as you are able to learn and know what you are doing.
You are also able to set aside funds for your retirement at an early age, so you would have a very financially comfortable retirement.
You have a great idea about the purchase of a multi unit using the FHA mortgage loan program. If you reside in one of the units, which you should, this would be considered your primary resident and is treated the same as you purchasing a single family home. The interest rate would be the same as you purchasing a single family house based on your credit score.
This is the best means of getting into real estate investing.
In order to be a successful real estate investor you are required to educate and be knowledgeable about the real estate investment field.
Purchase several books on the subject of real estate investing.
Buy and read as many books as you are able in order to learn the various investment vehicles and techniques used to obtain these investment vehicles.
The books will give you ways of raising money for real estate investments, as well as an idea as to which investment you would like to pursue.
You would be able to purchase these books from your local book store as well as Amazon. You would want to keep your library current so, buying the latest books keeping abreast of the current trends would be to your
A. Distressed property
B. Foreclosure property
C. Short sales
D. Probate properties
E. Structuring the purchase of property, so as to use as, little of your money as possible. (There are many techniques in doing this. You need to learn about 2-3 that you would be successful at doing, and is able to do in your sleep.
F. Some of these books would have a few forms you are able to use in the buying of investment property or making a decision if you would profit by buying a property.
In some cases you might be required to edit or alter some of these forms to fit your situation.
#2. Real Estate Investment Group
Join a local real estate investment groups.
Being a part of the local real estate investment group would give you first hand knowledge of individuals that have purchased real estate investment properties. You could possibly find a mentor that would assist you in the buying of properties. The real estate investment group members would validate the information you would learn in your books.
This group would also be instrumental in informing you of alternative means of obtaining investment funds.
There are many techniques where you would need little if any of your money to purchase properties to flip or use a rental to get passive income. You would learn how to use the :subject to the existing mortgage loan, controlling the property with a few hundred dollars and wholesale it to other investors.
Making a contract that allow you to do the rehab work, and not paying on the mortgage until the rehab work is complete and you would then pay anyone you owe once it is sold.
You would have to Google for this real estate investment group followed by the city and state in which you reside and want to invest.
I hope this has been of some benefit to you, good luck.
Full time job and part time graduate school – as I did, which is great.
To invest in the stock market (not day trade), takes some learning first, and then specific research, and then buying and holding until some future time, you sell, but don't watch it for hours a day. It takes up-front cash.
To invest in rental properties, takes loans and credit rating and high leverage, even more education and research before buying, managing the property and tenants on an ongoing basis and detailed accounting and tax records, including finding tenants and keeping control. It is maintenance of something you don't have continuous access to. Where is your time to do these things? FHA is first time buyers assistance but still takes money in down payment, much larger than a single family and a higher scrutiny where the lender assumes an empty building for you to buy it and the rent is not included in your income.
Is it possible to buy a duplex as a first time buyer? Possibly, if you can afford from a loan evaluation without a tenant. As a multi-family building it is even harder. I don't think you have the available time to manage, much less the financial resources. What location are you referring to, what is your credit score and current debt level and income level to support such a venture, and then consider the management time, that you obviously expect it to manage itself.
It isn't about age, except for a typical financial, credit rating, and available time you have. Do you have a 700+ score and down payment large enough to buy? FHA mostly complicates matters and slows the process of buying. They don't favor multi-family home purchases.
depends on how much money you have saved for a down payment
if you want to invest in rental properties you will have a large down payment, a good sized mortgage which your rentals will not equally pay for
what you will be able to rent very likely will not cover your mortgage
No, you are not too young. If you have the money, it could be an excellent investment. Listening to "everybody" is not always wise. Listen to good sources, the older and wiser and those with plenty of applicable experience. If you choose to do so, take the time to learn Landlord & Tenant laws in your state. Becoming a landlord ignorantly gets people into trouble.
It's actually a great plan. Buy a duplex, live in one side and rent out the other. You will learn very quickly if you are cut out to be a landlord. Instead of discussing this with naysayers, discuss it with an actual mortgage loan officer to see what you qualify for. You can buy 2 to 4 family units with an FHA loan as long as you intend to live in one of the units. It's a wonderful way to get started!
Your'e grown, it's up to you. However, you need great credit and a 2 year job history. Good luck! Also you will need to live in one of the units or you will be considered non owner occupied & can't go FHA. Also future rent payments cannot be counted towards your debt to income unless you can prove on tax returns a 2 year history of being a landlord.
You aren't too young. You are too inexperienced, though. Are you proficient in plumbing, electrical, carpentry, drywall, painting? Even if you could afford to hire people to do all this work in a potential profit-making real estate venture, how will you know if they are doing things right, or overcharging you? The truth is you aren't limited by your age but realize that you are limited by your knowledge. Spend some time educating yourself first. That way you will be taking a calculated risk instead of a shot in the dark!
You'd be better off investing in a REIT which holds rental property. Owning real estate is such a money pit it often is not a good investment.
Cannot go FHA on a rental unit.
do it now