Where and how do I begin?

Question

I’m almost 40 years old. Been working my butt off [full time] 5 days a week, since I was 18 hoping I could get myself a house but until now, I’m still renting. I have around $25k in my savings, $5k on my emergency fund, zero debt & 750+ credit score. I’ve been reading intermittently about real estate for 3 years now and I just started binge watching & listening to BiggerPockets. I am pretty sure that I want to do real estate wholesale investing I just don’t know where and how to start. I’m from Seattle. Will my money bring me my 1st investment? Will there still be a person/s willing to invest their time on mentor me? Is there a group for real estate newbies I can join? Please help me better myself financially. Thank you.

Michael Haas · Answer

Account Closed if you're working full time already I wouldn't advise you to take on hobby-wholesaleing... its super competitive out here and your time, energy, and money are better spent elsewhere in REI.

You can house-hack something in the greater Seattle Area with that $25,000 or less in savings using an owner-occupied loan (3-5% down) and/or one of the Washington State Housing Finance Commission programs. WSHFC is a non-profit dedicated to helping every Washingtonian own their own home, and this program allows us to take out a loan with 3%-5% down, then get up to 4% down payment assistance so the cash required to close is super-minimal (as little as $6,000 in some cases, depends on the purchase price of the property though).

Pretty much everyone on BP has heard of Househacking by now, but to recap, you'd be finding a house with separate entrances or a tall basement that can be rented out "by the bedroom" or even "by the unit" if you wnat to maintain your privacy. One reason this works so well is that owner-occupant financing (when you live in the house) has lower interest rates than investor/landlord financing, so you get the best of both worlds if you rent part of your primary residence out – rental income, tax deductions, and low interest rates on your home loan. Definitely feel free to message me for some more info about your options- you could get this done (barely) with a regular 3% down loan, but it may be worth using the WSHFC so you don't need to dip into your reserves and emergency fund as much. For that program you need to attend a homebuyer’s class taught by a WSHFC trained Realitor and Lender. Let me know if you’re interested and want me to send you details once the location and time of my Homebuyer classes is set, and if you have any questions about how this works. Cheers!

Jon Pierre · Answer

Hello Jade and welcome,

It is not common to see me agree with many realtors but Michael above I believe has brought up very good points. House hacking may be your best bet. I have many rentals as well as 4 flip properties going on in different stages which are strategically scheduled. I have been doing this for many years and have done very well financially.

Guess what I don't do?  I don't wholesale. I did a bit of wholesaling a few years back and learned it was very time consuming and better left to others who may have  better connections and contacts. In addition there are always underlying problems with any home being wholesaled or with the way our economy has been the last 10 yrs, they would not be wholesaled.

Though you loose a bit of privacy, house hacking is a great first step. Looking at your financials you do not have a lot of working capital so I can see why wholesaling may seem appealing to you. Remember, there are a lot of wholesalers out there. They have a lot more experience and probably connections. So basically yes you will be up against a lot of competition.

My wife and I lived in Belltown for 8 years, we moved to Everett for more affordable housing about 7 years ago. She still works in Seattle and commutes and we still own the condo in Seattle which we lived at. Now we have found very good deals up North which are much more affordable and have a nice portfolio of rentals. Everything we touch seems to cash flow very well.

Please feel free to reach out to me if you have interest in rentals or flipping, that is something I could give you great input on. -Jon

Account Closed · Answer

@Jon Pierre Thank Jon! You just pumped up my desire to know more about real estate! Between rental and flipping, for me rental is more appealing because it looks a little less complicated. I love to know more ways on how to acquire a rental property.

I will be more focus on doing research and will definitely need your knowledge too.

Account Closed · Answer

@Michael Haas Househacking had always been in my head but the amount of money I have is always holding me back.

Receiving responses from knowledgeable people like you is a very good start for me. Thank you. I will do more research and will definitely ask you more questions.

Account Closed · Answer

@Michael P. Thank you. Been considering moving out of Seattle.

Account Closed · Answer

@Matthew Lopez Thank you. I will do everything to educate myself.

Michael P. · Answer

Move from Seattle to an affordable city

Where and how do I begin?

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