Taking Chances, Aspiring to own first multifamily

[Austin Richey]

Hi Biggerpockets, I'm 21 years old (Total noob to biggerpockets and RE) working as a maintenance man at a Mobile Home Company in the Southern Suburbs of Illinois. I just recently got introduced to real estate by watching a guy on the internet named Jay Morrison. He introduced the idea of getting a duplex, renting the other half out and living for free on the other side. He also mentioned having to put 3.5% downpayment on a home with an Mortage insurance premium of 1.75% upfront. I'm looking to either get my first home in Georgia, Florida, or even here in good ole Illinois. I'm also looking to own 4 properties total by the time I turn 25. If i'm missing some information on understanding an FHA loan please help me out. However I do have a few questions for my fellow biggerpockets community.

1. What books would you suggest to me on getting started on my multifamily foundation?

2. What prices should I be looking for when it's come to my first home?

3. What are good websites to look for homes with FHA Loans?

4. Any places in GA, IL, or FL you would suggest investing in?

5. Any other information you could possibly think of to give a young aspiring investor as myself?

Thank you in advance with all of your respones. Take all feedback into consideration only looking to better myself.

[Aaron Montague]

@Austin Richey

Welcome to BP. This is a great resource that is getting progressively better as more folks join up and share their experiences.

Here are few good options for getting into properties. Both Owner Occupied (OO) and Investment.

0% Down:
NACA (https://www.naca.com)
VA Loan (http://benefits.va.gov/HOMELOANS/index.asp)

3.5% Down
FHA (http://portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home)

3.5% AND Renovations
FHA 203k loan (http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203kabou)

5% Down
Homepath Owner Occupied

Not as cheap, but come with renovation options attached to the loan:
10% Down
Homepath Investment (SFH only)

20% Down
Homepath Investment (Duplex only)

25% Down
Homepath Investment (3-4 Unit Buildings)

Auxiliary:

http://203kcontractors.com/

Q: I like the concept of MFH investing, where should I start?

Short Response:

1. Eliminate your rent payment
2. Bring all deals to the BP community (and be humble when doing so)
3. Stick to the returns you want

Long Response:
Learn everything you can about multi family investing. Every day you should answer a few questions and write down several new ones.

The general theory is that you need to drive costs out of your life and/or add new revenue. If you live with your parents, and they don't charge you rent, good. I'd then start forcing yourself to put $500-700 away each month as a "rental" payment towards some real estate.

If you pay rent of any kind, to your folks or to another landlord, find a way to eliminate it from your life. My suggestion is to find a 3 or 4 family property that you can purchase. FHA loans are a good way to go, but be wary of the additional percentage points you have to pay each month as PMI. VA loans are even better, but require you to have served in the US military.

Run every deal you find through the BP community. Some of the responses are harsh, but they are eye opening. There are people on this site that have been buying and selling 4x as long as I have. When I find answers to my daily questions, I can almost always find the answers here at BP.

Last one for the moment: stick to your numbers. It bears repeating: stick to your numbers. If you want $200/month and a 12% Cash on Cash return for your investment, stick to that number. If you pick 12%, 9% is not good enough, nor is 11.7%. Make your offers accordingly.