How soon can I Buy my first rental property

Buying & Selling Real Estate
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How soon can I Buy my first rental property

Senad Salihovic
Louisville, KY · Member since 2014 · 34 posts · 0 votes

Ok guy here is my situation

Debt 

home 74k   - Monthly $600

school 21k  - Monthly  $164

credit card 3k - will be paid off ,in next month in a half 

Trash, gas, electric, phone, internet  - 350 monthly

I bring home $500 a week, 

would I be able to get a loan for about 50,000 to buy a single family home and turn in into a rental? Hoe much will I have to put up in cash?

Any ideas or tips?

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Greg Baker
Rochester, NY · Member since 2014 · 83 posts · 19 votes
11y
Senad, I'm not sure of your family situation, but if I could rewind the clock 6 years I would have bought a duplex or triplex, lived in one unit and rented the others. There is very attractive financing for this and would have allowed me to save hundreds more per month towards future investments. I would have looked to move into a "new" duplex triplex every two years or so following the same pattern. Once we're truly settled work wise we could buy our first true real estate liability (primary residence!) with cash flow. I mentioned family because a.) I'm not sure if my wife would have been up for this, and b.) we actually wanted to move for work within the last 3 years but could not because of how upside down we are on our home. Pros and cons there. Good luck!
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  • James Stevens
    Contractor · Temple, TX · Member since 2014 · 379 posts · 164 votes
    11y

    What's your credit score?  That'll have a big influence on it.

    0Reply
  • Joseph Ball
    Residential Real Estate Agent · Groveland, FL · Member since 2012 · 504 posts · 395 votes
    11y

    It is difficult to get small loan amounts. If you could save maybe $5,000, I'll bet an oatmeal raisin cookie you could find a seller who might seller finance. Maybe? I really like your motivation. 

    0Reply
  • Peter MacKercherBusiness Member
    Residential Real Estate Broker · Saint Louis, MO · Member since 2014 · 1k+ posts · 567 votes
    11y

    It all depends on your area and how much money you have in reserves. I don't know your area but in st louis you can buy a single family property for 50k and rent it out for $800. 

    You should first take to a mortgage banker or broker. To get want they want to qualify. You might have to move into the new home and rent out your old home to get a loan. but lately i have seen people buy with as little as 3% and closing cost wrapped in. 

    Happy hunting let me know if you need any help. 

    [email protected]
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  • Senad Salihovic
    OP
    Louisville, KY · Member since 2014 · 34 posts · 0 votes
    11y
    Originally posted by @James Stevens:

    What's your credit score?  That'll have a big influence on it.

     credit is ok 750 area all around on all 3

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  • Senad Salihovic
    OP
    Louisville, KY · Member since 2014 · 34 posts · 0 votes
    11y
    Originally posted by @Joseph Ball:

    It is difficult to get small loan amounts. If you could save maybe $5,000, I'll bet an oatmeal raisin cookie you could find a seller who might seller finance. Maybe? I really like your motivation. 

     If I only have to come up with 5k that won't be a big problem, I was told I need al least 25% or 30% of the property that just didn't sound right to me sow I had to ask on here:)

    0Reply
  • Senad Salihovic
    OP
    Louisville, KY · Member since 2014 · 34 posts · 0 votes
    11y
    Originally posted by @Peter MacKercher:

    It all depends on your area and how much money you have in reserves. I don't know your area but in st louis you can buy a single family property for 50k and rent it out for $800. 

    You should first take to a mortgage banker or broker. To get want they want to qualify. You might have to move into the new home and rent out your old home to get a loan. but lately i have seen people buy with as little as 3% and closing cost wrapped in. 

    Happy hunting let me know if you need any help. 

    I'm in louisville Ky are, its a very similar market here depending on the area you buy in. I am I have an appointment friday with a mortgage bank, not a bad idea, 

    Thank you, I'll send you a connect request.

    0Reply
  • Greg Baker
    Rochester, NY · Member since 2014 · 83 posts · 19 votes
    11y
    Senad, I'm not sure of your family situation, but if I could rewind the clock 6 years I would have bought a duplex or triplex, lived in one unit and rented the others. There is very attractive financing for this and would have allowed me to save hundreds more per month towards future investments. I would have looked to move into a "new" duplex triplex every two years or so following the same pattern. Once we're truly settled work wise we could buy our first true real estate liability (primary residence!) with cash flow. I mentioned family because a.) I'm not sure if my wife would have been up for this, and b.) we actually wanted to move for work within the last 3 years but could not because of how upside down we are on our home. Pros and cons there. Good luck!
    1Reply
  • Peter MacKercherBusiness Member
    Residential Real Estate Broker · Saint Louis, MO · Member since 2014 · 1k+ posts · 567 votes
    11y

    You would probably need 20% down on investment property. But if you're willing to move into it you can do a homeowner financing which is much easier. I believe you can do it every 2 to 3 years. make sure you do a 30 year fixed and it will help you in the long run.  

    [email protected]
    0Reply
  • Clay SmithBusiness Member
    Investor · Louisville, KY · Member since 2013 · 419 posts · 244 votes
    11y

    Do you have savings? Retirement fund? 401k? Parents willing to do 3 to 6 month loan if you cash them out later?

    If you want, rent the one you are in. You will get 75% of rents counted as income. Buy a new house to live in it for owner occupant financing for 3-5% down.  Repeat every couple years. When doing the math, insurance for a rental is less than you pay now.

    LREI Property Management LLC4.6442 Reviews
    WebsiteView Page
    0Reply
  • Senad Salihovic
    OP
    Louisville, KY · Member since 2014 · 34 posts · 0 votes
    11y

    My mom and brother live with me right now, I plan on renting them my first property, we have talked and discussed this plenty of times, my mother is old fashioned, pays cash for everything, no credit  at all. My brother is young and still in school, 

    We are a tight family, and they are on board with my decisions. 

    0Reply
  • Senad Salihovic
    OP
    Louisville, KY · Member since 2014 · 34 posts · 0 votes
    11y
    Originally posted by @Clay Smith:

    Do you have savings? Retirement fund? 401k? Parents willing to do 3 to 6 month loan if you cash them out later?

    If you want, rent the one you are in. You will get 75% of rents counted as income. Buy a new house to live in it for owner occupant financing for 3-5% down.  Repeat every couple years. When doing the math, insurance for a rental is less than you pay now.

     Yes i have savings, and retirement savings, not fan of 401k at all, but I do have a couple of 401ks from previews employers nothing much maybe 4k total 

    0Reply
  • Cody Steck
    Residential Real Estate Agent · Salt Lake City, UT · Member since 2014 · 156 posts · 50 votes
    11y

    @Clay Smith don't you have to wait two years for 75% of the rental income to be counted towards income? Does this policy change if the place is your current primary residence?

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  • Clay SmithBusiness Member
    Investor · Louisville, KY · Member since 2013 · 419 posts · 244 votes
    11y

    I do think there are rules around how many FHA backed loans you can have. Ask your lender they will know.to the best of my knowledge one could go out and buy a primary residence every single year and move on to the next one.it does not even sound like you need the extra 75 percent income to afford another $75,000 house.

    in the event you do get $5000 saved, I'm sure there are plenty investor out there that would sell you their rental properties at appraised value - what a realtor's commission would be and owner finance it for you.

    LREI Property Management LLC4.6442 Reviews
    WebsiteView Page
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