Advice for first purchase

[Joe Sniadowski]

Hi everyone, 

First, I want to say i was really excited when i found this site and it really lit a fire under my butt.  Im 33 years old, married, and have 3 kids.  Ive been an electrician for 10 years so have plenty of construction experience.  I flipped my first house in Delaware when i was 26.  Bought a very out of date home for $230k and virtually ripped the house apart and remodeled everything.  Sanded and restained all hardwoods, gutted small powder room, remodeled bathroom (besides shower), and ripped out kitchen vinyl flooring with leftover hardwood that i had from my brothers house, redid countertops, and of course a new coat of paint in every room including ceilings.  All in all i spent less than 6 grand in repairs and turned my 235k house into 280k in 2.5 years with minimal money and without the intent of flipping.  I planned on living there a long time and just did the repairs that i did for my own benefit and was going to redo everything again down the line when i had more money and wasnt doing everything all at once.  I ended up selling the house when i got engaged and bought a home in Pennsylvania with my now wife.   So i have the experience you could say and a decade of construction as my career, which obviously comes in handy in this business.

Anyways, im looking to start buying and flipping and/or renting.  Now,  my problem is i need to support my family so i cant just quit my job and throw caution to the wind, or sell my house and buy a cheap one to move into while i repair it, as i did my first house.  So being on a tighter budget this time around with less time to put ALL my life into flipping a house (at least for now) for a quick sale,  i figure my best bet is to start through a rental.  I figure if i find a good deal that doesnt require too much time or money in repairs and find a suitable renter, its more cashflow to give me that little boost to get started before i can make some waves.

So my question or advice that im seeking is, when i do find the deal(s) that i like, do you think it would be more beneficial for my situation to buy at 3.5% down and buy more houses that way in order to get the ball rolling or put down 20% on one house?  

Thanks for taking the time to read this and any input is greatly appreciated!

[James Masotti]

Originally posted by @Joe Sniadowski:

Hi everyone, 

First, I want to say i was really excited when i found this site and it really lit a fire under my butt.  Im 33 years old, married, and have 3 kids.  Ive been an electrician for 10 years so have plenty of construction experience.  I flipped my first house in Delaware when i was 26.  Bought a very out of date home for $230k and virtually ripped the house apart and remodeled everything.  Sanded and restained all hardwoods, gutted small powder room, remodeled bathroom (besides shower), and ripped out kitchen vinyl flooring with leftover hardwood that i had from my brothers house, redid countertops, and of course a new coat of paint in every room including ceilings.  All in all i spent less than 6 grand in repairs and turned my 235k house into 280k in 2.5 years with minimal money and without the intent of flipping.  I planned on living there a long time and just did the repairs that i did for my own benefit and was going to redo everything again down the line when i had more money and wasnt doing everything all at once.  I ended up selling the house when i got engaged and bought a home in Pennsylvania with my now wife.   So i have the experience you could say and a decade of construction as my career, which obviously comes in handy in this business.

Anyways, im looking to start buying and flipping and/or renting.  Now,  my problem is i need to support my family so i cant just quit my job and throw caution to the wind, or sell my house and buy a cheap one to move into while i repair it, as i did my first house.  So being on a tighter budget this time around with less time to put ALL my life into flipping a house (at least for now) for a quick sale,  i figure my best bet is to start through a rental.  I figure if i find a good deal that doesnt require too much time or money in repairs and find a suitable renter, its more cashflow to give me that little boost to get started before i can make some waves.

So my question or advice that im seeking is, when i do find the deal(s) that i like, do you think it would be more beneficial for my situation to buy at 3.5% down and buy more houses that way in order to get the ball rolling or put down 20% on one house?  

Thanks for taking the time to read this and any input is greatly appreciated!

 A 3.5% down loan only applies to owner occupant properties. If you're buying an investment property the best you'll do is a 5% down payment and that's only with some foreclosure programs. The odds of you finding a foreclosure that doesn't need that much work which isn't sold to an owner occupant will be slim, but not zero. 

More than likely you'll be looking to make a traditional acquisition and therefore you'll need to make a 20% down payment. In the current lending environment you may be able to find a non-conventional lender that will let you get away with a 10-15% down payment, but expect to pay for that in interest rate (upwards of 7%+)

No matter what though nothing is impossible no matter what anyone here tells you. You'll be given anecdotal advice, such as what I've provided above because generically speaking it applies. However, if you hustle you can find your own ways of making things happen.