Clayton, NC · Member since 2015 · 79 posts · 19 votes
So I have done a lot of research as well as been to a few seminars but I haven't be able to find any real estate investors in my local area. So next week I'm going to make the 2 hour drive to the closest REIA. Hopefully I will meet someone there who will be will into show me a few things in return for me adding value to them whatever that may be, such as a free intern, free tech support (in the last yea of getting a computer science degree) or just free labor worker for there properties. But the one question I have is that I'm only 21 and want to do buy and hold investing for the long term because I love my current IT job but I also love real estate as well. Should I go out and buy my first house and live in it for a year then try to rent it out? Or should I buy it, rent it out then continue to live in my condo I live in now?
Clayton, NC · Member since 2015 · 79 posts · 19 votes
10y
I can put 15% down on a home that has the purchase price of $100,000. But instead I Ben thinking about doing 100% financing instead since my long term goal is to hold on to it as a rental property. And if for whatever reason whatever reason that doesn't work NC appreciation will cause the home value to increase anyway so I would just sell it for a profit of my original plan doesn't work out. Any thoughts about this?
Registered Nurse (ICU) · San Jose, CA · Member since 2014 · 496 posts · 332 votes
10y
Justin Dixon If I'm not mistaken North Carolina has some great areas to invest in for good cash flow and perhaps some appreciation. This means you can invest close to home which is a plus. Meet ups are great but you can probably find a North Carolina investor that can steer you in the right direction here on BP. Networking is everything. Eventually you pick who you are comfortable with a start putting a plan into action. Just be careful of the people out there acting like they want to mentor you but are actually trying to sell you something. These guys obviously have a biased opinion on where and what to invest in. Good luck.
Ann Arbor, MI · Member since 2008 · 90 posts · 20 votes
10y
Hi Justin,
I'll tell you my short term goals, as they may line up with something you'd like to do.
In a sentence: FHA financing (possibly 203k) on a multifamily property.
In a paragraph: You should be eligible for a 3.5% down FHA loan, and if the property needs repairs you can do a 203k loan that will allow you to borrow whatever you need to get the property repaired. It's not quite 100% financing, but it is close. The issue comes with the time it takes to close. If you're competing for properties with investors that can offer cash and close in a week, you may have to pay a premium for the property to make it worth the seller. You live in that property, you have your 1-3 tenants pay your mortgage, and when you move out of that property it cash flows at $100 a door at least and you can do it all over again! That strategy alone could get you 4 properties, at that point the financing changes and you'll have to get more creative. But, 4 good solid quadplex deals could be $1600 a month of income!
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
10y
I'm a fan of leveraging your money and therefore recommend the smallest down payment that provides decent interest rate. I have properties that I put 25% down because it resulted in significantly lower rates but if the rate was marginally better than less down I would have gone with the smaller down payment.
I agree with @Alexander Ball that multiplex house hack is very attractive for young investors (I wish I had gone that route in my 20s or 30s).
Clayton, NC · Member since 2015 · 79 posts · 19 votes
10y
@Alexander Ball I agree with you that the multiplex could be a great option but the thing is they have high turnover rates where I'm located and they also aren't in the best neighborhoods were I live as well. However I do like how you financed that deal. But from my market research I have done it would 1 be there difficulty to find a multiplex home in even a decent area, 2 would be even harder to find decent renters at best.
Flipper/Rehabber · Charlotte, NC · Member since 2015 · 93 posts · 31 votes
10y
For many reasons I wouldn't get caught up in trying to find 100% financing. Also don't set a deal that only works based on appreciation. (counting on appreciation is a set up for failure, no matter what market you are in). Wait to find deals that give you a much better margin and thus multiple exit strategies. This may require you to be more patient looking for a deal, or perhaps getting more aggressive finding deals. Many beginner books and podcasts focus on how to find good deals; from bandit signs, to flyers, to driving for dollars just to name a few.
depending on your debt to income ratio ect, you may still qualify for a conventional loan for investment purposes. We are currently working a deal now with New Dominion for 15% down and very attractive interest rate.
Under BP tools, there is a rental investment calculator. This tool may revolutionize the way you are thinking about the numbers on a flip deal. thinking ahead for property management fees, cap ex, repairs, vacancies ect can make a huge influence on whether a deal is 'good' or not.
Be patient, keep looking for REI groups and utilize the bp podcast, forums and webinars to continue to grow. Good luck