How to get my first property?

Question

I'm looking for advice in the Wisconsin area on how to get my first buy and hold property or buy and turn property with limited financial resources? Any advice? Should my plan be to save up for the 20% for a buy and hold?

Marcus Auerbach · Answer

It can be done, but it's not an easy way to get started. If you don't have experience as a flipper or a landlord you will have a tough time understanding what a good deal look like. It is one of the most comprehensive job's in real estate, becaue you have to be a great marketer, people person, marketer, job estimator and general real estate nerd. Talk to an experienced wholesaler who makes consistently a full living on RE about what it takes. Buy & hold is by far the easiest in terms of skills, flipping is a lot more challenging and I would almost say wholesaleing is the toughest. I have a lot of respect for successful wholesalers!

Brian G. · Answer

@Damon James have you researched the concept "house hacking" here on BP? Imo it's the safest and easiest way to begin. It requires you to put 3.5%-5% down on a house or 2-4 unit. You rent out the bedrooms to roommates (SFH) or live in one unit (2-4) and rent out the others. Ideally, your rents will cover most/all of your expenses and lower your cost of living, thus accelerating your savings rate. After a year move out and do it again. Rinse and repeat.

Scott Schultz · Answer

Buy and hold is quite forgiving in that time can heal bad deal wounds, flipping if you make a bad deal, you lose money. I am a firm believer in saving your pennies till you have a reasonable down payment AND a some back up cash for the errors that will happen along the way.  finding a deal is the easy part really, being prepared for what lies ahead is the hard part for most people.

Jassen Bowman · Answer

You are actually in the perfect position to start implementing the Nomad model (what I’m used to calling the version of house hacking that I do).

The reason you’re in a good position is because you already have one house, and you bought it a year ago.

In Nomad, you buy another house for your family, move in, and convert current house to a rental. Repeat every 12 months.

Your spouse obviously has to be on board with moving so much, but if you run the numbers on this strategy, it’s amazing. You can buy houses perpetually at 5% down, with owner occupied interest rates, and no conventional loan limit (10 loan limit doesn’t apply if you are going to live in the house).

Rebecca Knox · Answer

You may want to research the BRRRR strategy, asset based lending, seller-financing and land contracts as well.  Also, learn the concept of wholesaling so if you find a property where the numbers don't work for you or you can't get financed,  you can wholesale it.

Shaun J. · Answer

You could also put in the work and wholesale until you have a cushion and 20% down to do your next deal.

Caleb Jordan · Answer

You've gotten some good feedback on options. Owner occupied is least amount down. You could look into a hard money loans to aquire a fixer upper, there are some low down payment options there. Once property is fixed up and worth more you can hypotheticaly refinance into buy and hold loan with no money out of pocket.

Then if you just want to purchase using coventational investment property loan you need 15 to 25% down.

Alton Lewis · Answer

Wholesaling is realistic. The question you may want to ask yourself is are you ready to do what it takes to succeed in that category. It is definitely a lot of time and effort to get that first check. Knowing how to find deals, motivated sellers, finding buyers, rejections, and researching its a lot. It can be done, there many success stories out there and many lessons learnt too. There are many families out there making it happen for them and you can too. Knowledge and awareness is key to success.  It will frustrate you at times, but keep a good attitude and learn as much as you can. Never limit thinking to what is realistic and what is not. Creativity to make it realistic is all it takes. That has been proven many times. Good luck out there, and learn about all the different strategies real estate has to offer.

Damon James · Answer

Thanks everyone! Great information for me!

Damon James · Answer

Wholesaling seems reasonable for a new beginner, but is it realistic?

How to get my first property?

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