Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Starting Out
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated 2 months ago on . Most recent reply

User Stats

1
Posts
2
Votes
Sebastian Albors
  • New to Real Estate
  • Asheville, NC
2
Votes |
1
Posts

New and Looking to Make First Real Estate Purchase

Sebastian Albors
  • New to Real Estate
  • Asheville, NC
Posted

Hello! I am new to the group, real estate investing in general, and trying to learn so that I can take my first step into real estate. The idea of owning real estate as an investment has always made me excited, but truthfully I don't know a lot about my options. Along with the research I am doing, I'd love to hear from others about their firsthand experience.

I am 33 years old, recently married, no kids but plan to have our first in the next year. We live in Asheville, NC, which seems to be a pretty expensive market. One important detail is that my brother currently lives with us, and we are open to having him stay with us if we do make a purchase as a renter to help cover our mortgage.

I see our main options as the following:

1) Buying an SFDU to live in, and "house hack" with my brother continuing to live with us and pay rent
2) House hacking with MFDU. Doesn't seem to be a lot of options around here for that though
3) Continuing to rent where we live, and buy a separate property to rent out

I personally feel like having my brother to help out as a renter is a huge advantage. Although we wouldn't want that to do that forever, we definitely don't mind it for the time being.

 I'm curious from others that have more experience, what feedback you'd have for someone making their first purchase? 

I am excited to learn and hopefully make our first purchase soon!

Most Popular Reply

User Stats

433
Posts
479
Votes
Mitch Davidson
  • Lender
  • Asheville, NC
479
Votes |
433
Posts
Mitch Davidson
  • Lender
  • Asheville, NC
Replied

@Sebastian Albors. I live in Asheville as well, and am happy to help you kick around strategies. Also we have two great BP meetups per month here that you might find really valuable. For me they've been a great source of ideas, resources, energy, and comradery. If you DM me your email address I'll get you added to our events email list.

Regarding the options you listed, I think #1 is best. You can get into a home for little or even nothing down, perhaps add some value by renovation, then hop to a new primary residence in a year with little or nothing down, and repeat. And you'll have the best rate/points options with a primary residence.

Option #2 is great, especially if you're willing to move into one of the units (because the down payment minimum is just 5% or 3.5% depending on program), but as you mentioned it's really tough here to find small multifamily here. And the few options that arise are very overpriced due to scarcity. That being said, you can find a home that can function as a duplex. Unlike true multifamily, meaning the county or city has the property categorized as multifamily, you can't use potential rental income from the additional units to help you qualify (if the home is single family per the appraisal, that is). You can convert the property to MF after acquiring it though. And even it's SF when you purchase it, again because it's not 100% MF including the county/city classification, you can use rental income from both units to help you qualify for future investments.

Option #3 is something to use only when you're not willing or able to move into the property. You'll need to put 20% down for one thing. Technically, Conventional allows 15% down but you end up incurring a hefty hit to your rate/points options when you put down less than 20%, which makes causes most people opt to put 20% down. Also, compared to a traditional loan (i.e., conventional, FHA, etc.) for a primary residence your rate/points options are going to be higher for an investment. The same is so if the home is classified as a second home. Count on the rate to be at least 1% higher than where you'd be for a primary residence, and to maybe even cost a little in points depending on the program, your credit scores, etc.

Happy to help you think on this more if you want to setup a call.

Loading replies...