I am new and getting nervous about my first buy

[Jonathan Wooten]

First of all, thank you for reading.

I am 24 and I live in Chattanooga, Tennessee I have made my goals for the year ending 2017...to have one owned hack house and one investment property. I have access to 40k liquid and have spoken with hard money lenders about pursuing an interest only loan with the goal to refinance after 12 months. my problem is quite common. I am having issues finding deals. I just offered on a for sale by owner and it was shot down real quick (expected) My big question is (If you were in my shoes, how would you go about getting your first deal using creative financing? I have all the pieces lined up, but I feel like my market is tapped due to the high amounts of sellers increasing home values. should I be contacting landlords for portfolio properties, old run down houses, fsbo, or pre-foreclosures...offering to buy the owner out of their foreclosure?)

thanks so much for the input everyone! 

[Scott Hollister]

Welcome @Jonathan Wooten, 

You are in a great position and your goal can be accomplished with dedication and hard work! Which it looks like you already possess these qualities, you're on BP! 

Don't get discouraged with getting shot down, you might find yourself putting many offers in before having one accepted. *Don't sacrifice being a wise investor to just get a property* 

Problem: Finding Deals

• Have you connected with an investor friendly agent? 
• Have you connected with local BP members? Considered going to meet ups? 
• Are you pre-qualified for your first home? (Call Comtrust FCU, see person below)

Big Question: If I were in your shoes...

• I was just in your shoes. I bought a house hack, then a REO BRRRR cash out refinance, and now Im am working on my first flip. Personally I think you're doing this in the right order! A house hack is the best way to enter real estate investing. (IMO)
• If I were you I would go FHA on the house hack, keep the bulk of that 40k to get your BRRRR after you have your house hack stabilized. What I mean is that it might need some work, get that done. Get a quality tenant in there, move into your side, possibly find a roommate? (With that FHA loan you will have PMI for the life of the loan, weigh out the benefits and make the best financial decision possible)
• Then start looking for your next rental. During all this you act like a sponge, listening to all the podcasts, being active on the forums, and reading any book you can get your hands on. Audio books work as well. 
• Use your money to partner with hard money and cash out refinance out in 6 months. (This can be done! Talk to Dana Bolin at Comtrust Federal Credit Union in Tennessee. They don't have time frames on cash out refinancing) I knew this connection would help someone one day, they have a branch in CT but the guidelines are different. She is extremely nice and I wish I could use them! 
• Once you have that property, get the work done as fast as possible and don't sacrifice quality. If you get tenants in the house within two months they will pay the interest only loan for you. They will most likely cover all costs until you can refinance, which will leave you in a better cash flow position. 
• TAXES: Don't be so aggressive on your taxes. This hurt me when I went to refinance. I had too many loses on my house hack and I couldn't get financing. Just be smart and consult a CPA if you need. 

It is GREAT to find off market deals. Just be cautious when buying them as a new investor. 

Don't give up Jonathan! You can do this!