College Student Looking to Buy First House

[Daniel Philpot]

Hello Bigger Pockets Community. I am a sophomore in college at Evangel University in Springfield Missouri. I am a finance major and I have a passion to get into real estate. Recently, I have become inspired to purchase a single-family residence and utilize the house hacking method. Here is my why; Instead of throwing money down a hole in the form of renting an apartment over the next couple of years, I want to put that money towards paying a mortgage. Also, I can rent out rooms to friends for a cost below what they might pay in an apartment but offer home amenities. Now that you know my plan, here are my questions. Is this feasible? I am 20 years old with very limited (but good) credit built up. How do I go about getting a 30 year $80,000 ish home mortgage? I could reasonably put down 10% possibly 15%, but would have trouble getting up to 20%. Obviously, I would want to avoid PMI costs. Any and every feedback would be awesome. I have been listening to Bigger Pockets podcasts, reading books, and currently taking a real estate investment class. I want to make this work, thank you for the advice. -Daniel

[Michelle J Olson]

Dear Daniel,

There are a lot of young men on BP who are having (or have in the past) amazing success with house hacking.  I feel this is an a great idea and I'm encouraging both of our college age children to do this exact thing.  (& gently helping them find). 

It's impressive that you've already saved money, have a strong work ethic (even already running your own business) and that your not only brave enough to do this, your on BP and actively planning your own life.  

This could be the beginning of your hugely successful life and only You can make that happen.  

You've done good already by being here learning all about it.  There are men here who will be of much help to you in figuring out how to make it happen.  

My suggestion is to make sure it's a house that other students will be in line waiting to help you keep it rented when/if you move on to another area, or town, and one that is very close to campus (walking distance is often optimal, but not an absolute necessity) might be helpful, but I believe making it an attractive-to-students house is important.... Somewhere modern students want to spend time. 

As you already know, there are Many things to consider when purchasing a property, but I'd like to suggest -- don't let the details bog you down so that they keep you from moving forward on your plans ..... just figure out a way to make your mind ready for the challenges and get ready to make some adjustments and changes where your plans might not always be going how they were invisioned, but do this while keeping your dreams in view and keep up the action that helps you to keep moving forward, toward making something happen (even if it's babysteps).    I'd also like to suggest:  a big enough kitchen & common areas (kitchen, living & dining room) that y'all don't get right under each other's feet too much, decent closet space & storage, an extra bathroom would be great (at least a 1/2 bath - gives you better value already built-in .... bathrooms are an extremely pricey addition), off-street parking (many cities have ordinances against parking on lawns), updated electcicals (incl. plenty power for all the electrical gadgets that students have nowadays and make sure it's on the right side of the tracks (so to speak) = safest area ....  remember they one day very soon, you may end up renting this house to a group of girls who's daddies will pay you good money for a very nice house with some amenities for their daughters... but what they're really gonna be looking for is how safe is the street & the specific vicinity/neighborhood where their darling daughters will be spending time.  I know every single formed of mine will pay a couple hundred more dollars ( or more!) a month to feel safer about where their daughters are living and walking around campus (esp. at night.)

I won't say it's a total end-all, not at all, but location, location, location can help &/or hinder in REI...

I say this with experience in rentals that are in rough areas of our city... it's got its benefits, with a huge hope for one day it being with it, but I don't feel that C- level housing is ideal for college students' success.... not for the landlord, nor the renters.... but that's my-mama-opinion. 😉

Will you plz keep us posted on your adventure into REI?

Good luck!