First Post of an Aspiring First Time RE Investor

[Federico Costa]

Howdy!

I am searching for patient souls on this forum willing to allow me to pick their minds about investing in RE from scratch. I know we all started somewhere, and I am looking forward to any insightful and inspirational conversation of where some you started. Since my field of work is the embodiment of the word:"instability," when the economy takes a hit, I have been gathering information about meaningful ways to diversify my sources of income; furthermore, RE investing has always interested me, and I believe I have the proper motivation to make it work.

I have been doing quite some reading and studying about the topic online, podcasts, ebooks, etc. but I would like to take a more meaningful step towards achieving something more concrete. I am looking into funneling money from my main job into this project, and I want to reinvest everything I make from it. Specifically, I am interested in purchasing my first multi family property for the sole purpose of renting it, although I know a few people who are running successful Airbnb, so I understand it may work as well if properly managed.

I apologize for the generic post, but I figured to try my luck and see where it takes me.

Thank you for your time and patience.

[Melissa Hartvigsen]

Hello @Federico Costa,

I built my portfolio by house hacking (holding for a while, and later using a 1031 exchange to acquire more units) here in the Portland Metro.  I have short term, mid term, and long term rentals. I love seeing others succeed, and in our market purchasing a multifamily property as a brand new investor can be challenging due to the up front cash required. It is substantially more than if you live in the property.

For example: if you buy a house in our market using the median home price of $550,000 as an investor the minimum down payment of 15% is $82,500, versus an owner occupier can do as little as 3% down payment $16,500.  In addition to your down payment you also need to budget for 1-2% of the price for closing costs. Investors also have higher interest rates.

For those reasons, you might be a great candidate for house hacking. Either you buy a single family home and rent out to roommates or rent out rooms on Airbnb while you live there (you only have to do this for a year), or you purchase a duplex and have part of your mortgage subsidized by the tenant living on the other side.

Another benefit to house hacking is that you may be eligible for one of the many first-time home buyer incentives available to Oregon residents with can offer you (depending on the program) money for the down payment, closing costs, or a below market interest rate. None of these programs are available for investors. Here are just a couple of examples:

Gresham Welcome Home - offers up to $40K in down payment assistance

Oregon Bond w/ below market interest rate or cash grant for closing costs.
Rate Advantage 6.125%, Cash Advantage 6.75% (also gives up to 3% of purchase price for closing costs). Normal rates on Friday were 6.98% without the Oregon Bond.

Our local NW REIA has meetups for investors, and even if you don't join as a member you can attend some events for free. I recommend the "roundtable" so you can meet with other experienced investors. https://www.northwestreia.com/events

Send me a PM if you are interested in being connected with a lender that talk to you about first time home buyer programs.  Also, if you wanted to meet up for coffee I can share some local market insights.

Melissa