Truck driver - Rookie questions

[Reco T Bumpers]

I am a truck driver, and I team drive with my girlfriend.  We are both interested in real estate, and both looking to purchase our first investment properties in the first half of this year.  I have been intrigued by the idea of new construction.  I am hoping that this would cut down on repairs and be easier to manage while I'm on the road (I intend to use a property manager).  We both live on the truck and rarely take time off, so I am also hoping the first property could serve as both an investment and a primary residence.  I live in Houston, TX and she lives in Dallas, TX. We would love any recommendations on good property managers in both markets.

We are both interested in multi-family, but I have also been looking at Lennar Next-Gen homes with the hope of converting the "next-gen" suite into a short term rental.  Has anyone here tried this strategy?  If so, with what results? 

We are currently W-2 but are planning to get our own truck after buying the first two properties.  I am concerned that the transition from W-2 to 1099 will make it harder for us to grow our portfolios.  Does anyone have any suggestions for this as well?  Barring a major setback buying our own truck should equate to an immediate increase in income.  It will also mean that we went 1099 in the same industry where we already had 3+ years of W-2 experience.  I have heard that sometimes it helps with lenders that you already have experience in the industry.

Spending weeks and months at a time on a constantly moving truck takes its toll physically and mentally.  We both want to regain some of our time freedom and feel more in control of our lives.  We understand that one property doesn't create financial freedom, but we are committed to growing our portfolio and want to make sure we get off to a strong start.  We welcome any suggestions on how to build a team of "rock stars" from long distance.  I know from reading David Greene's book on long distance real estate investing that finding the right agent can be a great start.  Any recommendations on rock star agents in the Houston and Dallas area would also be greatly appreciated. 

Additional info: Her credit scores are high 600's. My lowest score is 583 and the other two are low to mid 600's. We will both have over $25K each before making our purchases, but hope that first time homebuyer programs will eliminate our need for a down payment and reduce or eliminate closing costs. We have been looking primarily at FHA and USDA, but I keep hearing David say there are 5% down conventional loans out there as well.

Thank you.

[Kevin Romines]

By your comments, you have very good goals. You may need to bump your scores, but most loan officers have the tools just as I do to help get your scores up. Buying new build make sense from the maintenance standpoint. Also house hacking can be a great way to cover your mortgage while having someone there to keep an eye on the property when you are gone. Next gen or even a 2-4 unit can work nicely for you. If you have a VA eligibility you can buy a 1-4 unit property with 100% financing. You can also ask the seller/builder to pay your closing costs. They will just bump the purchase price by the amount needed to cover them and so long as the appraisal comes in high enough, you are good to go on that aspect.

If you don't have a VA eligibility, then the next best loan for a 1-4 unit is an FHA loan. FHA requires 3.5% down payment, so be prepared with the cash that you have to cover that.

Regarding going from W2 to 1099, it will eliminate your ability to get loans for at least 1 year as you will need to show the 1099 income on a tax return and it will be averaged for 12 months. Also, keep in mind that if you write everything off so your taxes are low, you may not qualify for the next properties due to low income and a debt ratio issue.  However there are loans that show income in other ways, so even though you may not qualify for a conventional loan, you can still do Non-QM loans for additional properties.

I'm of the mind that it is better to write off everything you can find to limit your taxes, and just do Non-QM loans from there as you will be paying the least amount in taxes and still qualifying for good loans. 

I hope all this helps?