Can we do this?

Question

I am in serious need of advice and I believe this may be the perfect place to find the answers i need. My son is currently incarcerrated and will be for around 6 more years. He recently picked up a bigger pockets book and in just a couple of weeks has finished his third one. He is convinced that we can begin investing in real estate in the near future, but i am not. Yes i would love and could much use some extra income. However, I am 65 with no capital and average credit. Can you please advise as to if and how investing in real estate for someone as me could be realistic...maybe your personal experiece will help change my mind. Thanks

Scott E. · Answer

I'm not going to sugar coat it... you have a lot of cards stacked against you right now. He's incarcerated for 6 more years. You have no capital. And you're nearing retirement age so ideally you will want him out of jail to be able to help you with looking for properties, meeting with contractors, doing some rehab work if needed, managing tenants, etc.

Can you guys pull it off? Of course. You can do almost anything you set your mind to. But is it going to be be easy? Nope. It's going to be very challenging until he gets out.

I recommend you plan to spend the next 6 years building your credit and saving as much money as you can. Have him keep reading books while he is in so he can get a strong foundation of education.

Maybe 1-2 years down the road you will be in a position to buy a small rental property. If you find yourself a good trustworthy real estate agent, they can help you navigate the process of finding and funding the deal.

(Also this forum is a great place for anything you need along the way. Come here to post any questions you've got and we'll help you out.)

Scott Mac · Answer

A steady job for 2 years and a down payment of 3.5% or 20%, and the personal ability to not be a recidivism statistic.

He will have to comply with Parole, because not being tossed in the can again is crucial to this.

I've been told a decent paying job for ex-convicts if they are strong and dependable workers is working on a concrete finishing crew.

If he can come up with the down payments and meet the lender requirements for work history and financial numbers I don't see any other thing holding him back.

But without those two, all of the knowledge in the world isn't going to help much.

The zero down stuff, seems few and far between.

Good Luck!

Jaron Walling · Answer

@Jordan R. Turner Investing in real estate requires sacrifices to get started. What can you sacrifice? Do you own your own home? What does your DTI look like? What is an average credit score? If you working with a lender all of this matters. Reading books is incredibly helpful but honestly I had to change my spending habits, personal budget, mindset about money, and make new friends. For the most part anyone dragging me or my wife down has been eliminated from our lifes. That's the hard truth.

You can get into a property with 5% DP, conventional financing, with good credit. I got mostly debt free and jumped into a distressed SFH. If you need another book check out  The Psychology of Money - by Morgan Housel. It's a popular book about investing and mindset.

https://www.amazon.com/gp/prod...

Joel Case · Answer

You should read the Bigger Pockets book Investing in Real Estate with No and Low Money Down. It will help you decide not only if you can, but also give you an idea of a path to take.

Nathan Grabau · Answer

The road of least resistance here is to use 5% down convention loans to purchase more single family properties, that you live in for a year, then rent out after you move out and buy a new one. There are down payment assistance programs that can get your first one below 1% down.

You could also buy a 2-4 unit property yourself with a 3.5% down FHA loan, live in one unit, and rent the others. The entry cost here is not 0(for either strategy) but it is lower than 20% which is what most people assume.

Can we do this?

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