Starting with low money down

[Jacob Northfield]

Hi all! Thanks so much for hosting this forum. I'm new to investing and am just scratching the surface but there are so many great resources here that I'm optimistic I can do well and I'm excited to learn as much as possible. 

I'm in Monroe County (Rochester), NY and there is an organization here that offers assistance loans for down payment and closing costs up to $40k. This loan would have the same rate as my primary mortgage, which today is above 7%. I'm unaware of how to afford a purchase right without this loan as I don't qualify for grants and I don't have enough for closing costs otherwise. So, the question is, do I take a risk and borrow the money for my first house hack now or do I slow down and find a partner who can assist where I don't have the cash? I feel like both options have pros and cons so I'm trying to learn what I can to inform this decision. Any thoughts are appreciated! 

[Ian Jimeno]

Hi Jacob!

Welcome to the world of Real Estate Investing! I often tell people the blessing AND curse of real estate investing is "There's so many strategies to invest in real estate".

Blessing: Options are limitless, you can get creative, full control over your asset

Curse: Analysis paralysis, overthinking, internal regrets

In your situation specifically, who can be your potential partner? Whoever it might be, whether friend, family, or person you trust/trusts you, see if you can get somewhat favorable rates with this person. Big thing is: Are you able to give them the returns they're looking for as an investor?

What's nice about the primary mortgage and purchasing it outright is that they're only using the debt play; the bank has no equity in the deal (in most cases). The immediacy of it is nice as well, I'm on my 3rd house hack working with 2 mortgages from the bank. I can safely say that getting in the game is most important, and if you can find a way to mitigate that mortgage as much as possible through rents, short term rentals, etc., then that's a win!

Not a fortune teller here, but I don't foresee interest rates going down any time soon. My buyers are seeing some huge upsides at the closing table, with sellers repairing or replacing items in the house or giving $5,000+ in seller credits! If you find a place in a desirable area and know it's a solid location, go for it with whatever financing makes sense to you!

Best of luck and let me know how it goes @Jacob Northfield!