College Student New to Real Estate

[Orlando Rodrigues]

I'm currently a senior in college in Massachusetts and ever since my school went online, I have pretty much been working nonstop and saving/investing as much as I can. My friends and I have recently been learning a lot about real estate investing and money in general during this time and I am very excited to make the jump into my first big investment. 

I know there are ways to get low down payments, like through an FHA loan or private loans, however with a college student's/recent graduate's salary, what do you suggest would be the best option in terms of a down payment? My goal is to first get a multifamily home and rent out a unit (or 2) while I live in the other; I figure it wouldn't be a good idea to put a majority/all of my money into the downpayment (which is what it might take with MA home prices) so I was curious to what anyone else would advise.

I am not in a rush to make this first investment, but I do want to start my real estate investing early if possible. What percentage of my overall worth should I put into this first downpayment? How much should I have saved for emergency purposes or factor in for renovation costs? I would really appreciate any sort of guidance anybody has to offer or would love to learn how someone handled their first investment. Thank you!

[Canesha Edwards]

@Orlando Rodrigues

Orlando welcome. Real estate is a great investment. I purchased my first home using an FHA loan. I didn't buy a multi family ( I'm kicking myself for it now) but the down payment was low and I purchased a brand new home. This was in 2016. Rates are lower now. I used my tax return and money from my savings to cover the down payment.

You can do the same thing. If your credit isn't decent 600+, I would work on that. While FHA loans are for lower income borrowers with lower credit...times are different right now and lenders like to see the higher score. So, work on that first of you need to.

You will be able to purchase 1-4 units with a FHA loan. I would make sure you are able to cover majority of the mortgage, if not all without having to rely on the rental income. Looks less risky to lenders. Remember this isn't your forever home so it needs to make business sense. Talk to lenders to see what you may qualify for and terms. This way you can start looking for properties.

Also, have a maintenance schedule and budget. Even though you live there, you’re also a landlord.

Hope this helps. Reach out any time.

Happy Investing!

Canesha