First Investment Home

[Brooke McGilvery]

I am in need of assistance. I have found my first home to invest in located in a college town but I don’t want to use a realtor and I don’t have much cash. I’ve researched other ways of investing but I need help starting out. Can someone please assist? Thanks.

[Mindy Jensen]

@Brooke McGilvery, why do you not want to use an agent?

[Thomas S.]

There are no short cuts to investing. You need enough cash to cover the down payment and closing costs plus reserve funds. Least costly route (financing) is to buy a multi and live in one unit yourself. You should be using a realtor unless you are only looking for deals off market. A realtor costs you nothing and saves a load of personal time.

[Ryan Deasy]

@Brooke McGilvery the agent's commission comes out of what the seller receives from the sale. You will not, generally, be paying the agent anything. Get an agent and let them do the paperwork, etc. You will not be saving anything by foregoing an agent on the buying side.

[Vinay H.]

Get an agent. Some experience is preferable in negotiating.

If there is any way you can owner-occupy the house whilst renting out the rooms to the students, you will get a more favorable treatment from the bank in terms of loan and interest rates.

[Brian Schmelzlen]

@Brooke McGilvery,

I think you should reconsider not wanting to use a realtor.  On the buying side, it is free.  The seller typically pays the commissions on both sides of the deal, and you generally wont get a discount for not using a realtor (unless the seller isn't either).  What I believe generally happens is that the seller's agent would get double the commission.

Even on the selling side, I would use a realtor.  My belief is that a good (even decent) realtor will sell the house faster and for more than you would be able to do yourself.

Now, if you are truly interested in not using a realtor, don't have much cash, and are looking for alternative ways to invest you could consider becoming a wholesaler (and as you build up your saving keeping some of the better deals for yourself).  I think wholesaling is very difficult in general and particularly difficult now given the current real estate market, but maybe it would work in your area.  You should do some research into it if that appeals to you.

[Brooke McGilvery]

Thanks everyone for the advice. I will follow up with a realtor and go from there.