First Investment Property

[Sean Bennett]

Good Evening,

My name is Sean; I'm currently learning and soaking up as much as information as I can about real estate and becoming successful in the space. I'm currently a truck driver and looking to purchase my first property near downtown Raleigh or possibly Morrisville/Cary area within a years time. I'm currently saving money to purchase the property under an FHA loan and rebab a little on the house so I can rent it out in a year. I would love some suggestions or just any kind of information from someone more experienced in the space. Hope you're all having a great day!

[Cory J Thornton]

@Sean Bennett - 

One of the most secure ways to start investing is a house hack. You can use an FHA loan on up to a four door property, so if you can get a duplex starting out, that would be an awesome first step! Another form of houseback is to target a single family home with as many bathrooms as there are bedrooms. This will make the property such that you can rent it by room to other professionals in the area. If you are targeting a single family home in Raleigh, Morrisville, or Cary, and are not inclined to do a by the room rental, then you may need to settle for a lower cashflow or be willing to do a heavy renovation. Finding cash flowing property in those areas isn't impossible, but it is still very difficult.

When you have the downpayment saved and are ready to start hunting for the property, talk to a minimum of four lenders. I like to encourage people to talk to the bank that holds their deposits and then 2-3 more local banks. I also like for them to talk to a mortgage broker as one of their options. Not all banks offer the same products. Shopping debt will often lead to saving a few hundred to a few thousand on the front end but can lead to saving thousands over the life of the loan. I always shop debt using the following points of comparison. This list is longer since it sounds like this is a first time purchase. 

Loan Term 

Interest Rate 

Origination Fee 

Is there a Debt Service Income Requirement? 

Is there a prepayment penalty? 

Is there a loan to value requirement? 

Can the interest rate be bought down and if so, how much of an up front spend to drop the rate? 

Are there any first time home buyer incentives or grants they can help you secure? Right now Truist has a forgivable grant of up to $7500 to help cover closing costs or rate buy downs. 

How much is their PMI?

It is always exciting to see someone else jumping into the world of RE investing! Best of luck on your learning and investing journey. If there is anything I can do to help, feel free to give me a shout.