Asking for honest opinion about what I should do next?

Question

Hi BP Community!

My name is Geoffrey and I just signed up as BP Pro members couple weeks ago because I really want to know more about real estate investing. A little bit about me,  I just moved to Detroit downtown metro 3 months ago and I am inspired by Brandon's "90 Days Challenge". Currently, I am doing 1 analysis per day while learning the concept and lingo behind real estate investment on the side while working full time. I just graduated from college and to be honest I do not have a lot of hard cash with me to pay 20% DP for properties (Good thing is, I do not have any student loan as my luggage). I did get myself prequalified and the loan officer told me that I can only buy SFH and I need to stay there for min. 1 year before I can make it an investment property (this option is available for me if I decided to pay DP less than 20%).

I am mostly interested in multi-family properties because I can either live in one unit and rent the other or rent both units out for cash flow purposes. However, the realtor told me that I can only buy multifamily if I have 20% down.Looking at the current mortgage rate (close to 5%), I am indeed a little bit cautious if I decided to buy a house (SFH or MFH).My game plan now is to save up my money for the next 12 months, so that I have enough principal to put 20% down for a property while learning real estate investing concepts since I am very new to all of this.May I ask what do you all think about this strategy? What are my options? All your opinions are much appreciated!Cheers,

Looking at the current mortgage rate (close to 5%), I am indeed a little bit cautious if I decided to buy a house (SFH or MFH).

My game plan now is to save up my money for the next 12 months, so that I have enough principal to put 20% down for a property while learning real estate investing concepts since I am very new to all of this.May I ask what do you all think about this strategy? What are my options? All your opinions are much appreciated!Cheers,

My game plan now is to save up my money for the next 12 months, so that I have enough principal to put 20% down for a property while learning real estate investing concepts since I am very new to all of this.

May I ask what do you all think about this strategy? What are my options? All your opinions are much appreciated!Cheers,

May I ask what do you all think about this strategy? What are my options?

All your opinions are much appreciated!Cheers,

Cheers,

Jamiel Strickland · Answer

@Geoffrey Tanudjaja I used Quicken Loans, they helped me out when purchasing the duplex.

Geoffrey Tanudjaja · Answer

Thank you @Christi Hawkins for your compliment and encouragement! I will talk to my loan officer and discuss with him about the possibility of using FHA loan.

@Jamiel Strickland thank you for sharing your experience! Please do recommend which lender I should talk to.

Christi Hawkins · Answer

@Geoffrey Tanudjaja  Congratulations!! As a recent graduate underwriters do look at your job history differently. It's helpful if you are in the same line of work you studied but that's rare. Gather up your transcripts, diploma, 3 years tax returns & W-2's (if you have that many), 1 month of your pay stubs ( if it's direct deposit they still send you something) & 2 months of your bank statements and find a good lender to get you approved through FHA. As a recent graduate there be programs in MI that will help with your down payment, there may also be programs in Detroit that can help as well if you live within the City limits. Find a good Realtor and you will be searching for  a 1-4 unit, could be a duplex, 3 family or 4 family and you're going to "house hack". Do it now while you're young!! You have to live there for 2 years but that will also give you 2 years of landlord experience which you can prove on paper. Good Luck and please let us know how it turns out, I wish I had been as smart as you are at your age Call your parents and thank them!

Gary Carver · Answer

@Geoffrey Tanudjaja  I’m a realtor here in Detroit. There are other options (cash, owner financing deals) also for purchasing.  Let me know if interested in locating them

Jamiel Strickland · Answer

Hey @Geoffrey Tanudjaja

1. I bought a Duplex in Dearborn, FHA loan, 3.5% down. I did not use 20 percent. Live upstairs and rent out the bottom units. I can send you a good realtor if you need one that can help on house hacking.

2. I have a friend who works for a downtown Detroit lender (same lender I used to get my Duplex), I can ask him how he can help you use different loan programs to buy a home.

Dozie Nwankwoh · Answer

@Geoffrey Tanudjaja

I’ve read about the 2 yr rule and it’d be interesting to know how much leeway the lender has. I’m sure the rule is in place to ensure the borrower will have constant income moving forward. Maybe they can work with you as a new graduate, maybe with a new career, with a good credit score. I’d also want to talk to a lender for more details about PMI & MIP.

It’d be interesting to hear from someone with more experience in this

Dozie Nwankwoh · Answer

Welcome @Geoffrey Tanudjaja!

I'm in similar shoes. Recently graduated and looking for a small MF in a new city. I think its a good strategy! Have you explored an FHA loan? That could possibly put you into a small MF for 3.5% down. Possibly could be a way to get you started in the game quicker.

Best of luck

Geoffrey Tanudjaja · Answer

Thank you @Jerry Nwankwoh!

I did look into this. Some of the restrictions that I found out is that you need to work in the same company or at least proof of consistent work history for at least 2 years (correct me if I'm wrong). Though, 3.5% down definitely helps out a lot in getting into the game quicker, it does carry PMI upfront premium and annual MIP that I'm not sure whether it will help or hurt me in the long run.

Any thoughts about this?

Thank you and best of luck to you too Jerry!

Cheers,

Asking for honest opinion about what I should do next?

Most Popular Reply