Advice for Aspiring Investor

[Kahner Delchambre]

Hello everyone,

I am wanting to get into multi-family rentals.  I have been looking to buy in the Brown County area of Wisconsin for a duplex.  For the last three years I have been reading, studying, and watching the BiggerPockets podcast.  On top of that I have made a business binder on how I will run my rental business.  That will cover the tenant management along with property maintenance and keeping track of the numbers involved with property management.  The reason I feel the push to get into rentals sooner than later, is because I have recently been laid off from my job due to lack of work caused by this pandemic.  It brings me to the realization that a stable job isn't really all that stable.  Looking at these duplexes I have also realized that I will not have enough for a 20% down payment along with any cost of potential repairs or renovations.  Also, being unemployed, I would assume that would make it difficult for financing.  My question is, Should I dive in head first and figure out a way to get into rentals now(which is my passion), or find another job and stick it out until I save more money in order to purchase a duplex on my own?  Which I have no problem doing, but I am torn because my passion is getting into rentals and not so much my blue collar job.  I appreciate your time and any advice you could throw my way.

Thanks     

[Peter Falk]

I'm not a lender, but my basic knowledge is if you want to get a traditional mortgage, you can owner occupy one unit in a 1-4 unit building as an owner occupant and buy with less than 20% down (with FHA could do 3.5% down, but will have to pay private mortgage insurance, but also get better interest rates as an owner occupant-generally about 1/2 a % better and some of the rental income should be able to help you qualify as well). That said, to get a mortgage, a lender will definitely need to see income, so maybe you could look into positions with a local property management company, lender, developer to learn more about the market and investing while having stable income. If you go into sales or starting your own business, most lenders will want to see 2 years of income from that, so a more traditional W2 job will get you qualified for a loan faster. If you want to hold these long term, definitely would try to figure out long term bank financing at our current low interest rates.