Help on my game plan

[Ashley Guerra]

Hello everyone,
I am 23 and looking to get into my first real estate deal this year. Why? I figured if the numbers make sense (i will get to those in a minute) and i can afford the house worst comes to worst, meaning not defaulting on the loan, Iam willing to invest in the property. I'm currently looking for a multi family (2-4) in my local market: Trenton, NJ. Homes ranges 250-350k. most of these homes need renovation minimum 10k most of the time. Now with that, I would want to go in fha203k loan or simply fha. 

Financially speaking, I'm still saving, but the goal is 50k saved up (all costs: closing, fees, down payment, portion of rehabbing costs) by this summer with my fathers help on the cash all while I continuously save 50-80% of my work checks to fund for rehabbing this property and I work off my second job and "survive off of that."
I currently live with my parents so my DTI is less than 43% for sure.
credit is good
currently have 13k in a roth ira, i have been reading i can use up to 10k tax free one time, should i leverage this?

Now, why summer?
I finally start my full time job, report 60k a year, which is not very high considering where I live and my home purchasing power. Now I have a question regarding when I can use my college degree and job as "proof of two years work" rule: when can i show consistent paystubs where i can be considered for a mortgage loan? 1 month, 2 months?
I don't plan on leveraging my dad at this point since we wont qualify for an fha loan if he is on the contract, so I heard.
With this said, how does this plan sound so far?


I am a planner type of person and am trying to build my own guide for home buying. I am aware of the home buying process from reading but I can imagine its like a bunch of gears working at once. I had a last question about when or if I should hire a buyers agents, assuming im preapproved and im at the point of finding a deal: do I hire a real estate agents or home buyers agent to find a home that fits my criteria? Or is this even their job? Also, is it rude to leverage multiple agents to see which one finds you a property first or using his contacts even though you didnt close with them? 
Even from all the reading I feel these things are unclear from a newbie investor

Thank you all! Any help is greatly appreciated

[Taylor Dasch]

Keep learning until you get the amount that you want saved up and you are ready to go. Its good to be a planning person in Real Estate - I'm not and I learn lessons the hard way. I would use the roth IRA to show as reserves if that is possible then use the money you save for the down payment. I'd stay with my family as long as possible if I could go back! Definitely a good idea to go for a MFH.

As far as planning, once you get into it, you will realize you dont really need that much to start buying houses, but I think it is a good idea!

Definitely hire a realtor that is an investor as well, they will be able to guide you through the process!

[Obiora Okagbue]

Hello Ashley ,

You are definitely on the right track, I became a real estate agent so I could invest in real estate. You would need an investor agent and also the ability to run the numbers.

I'm looking at a DSCR loan for fourplex and above for investing, but can't find a good deal yet in Somerset New Jersey area.

[Ashley Guerra]

Quote from @Obiora Okagbue:

Hello Ashley ,

You are definitely on the right track, I became a real estate agent so I could invest in real estate. You would need an investor agent and also the ability to run the numbers.

I'm looking at a DSCR loan for fourplex and above for investing, but can't find a good deal yet in Somerset New Jersey area.

Thank you for your response Obiora.

How is that area? I am a little familiar with it I went to Rutgers University and my friend lived near the area, and I'd visit often but know little about renters and such. I see it as a rising market, but honestly not sure if it's on the rise

[David Bilandzija]

@Ashley Guerra You've given a lot of thought to your plan and strategy. A few things to point out as your hear recommendations for alternative financing, i.e. DSCR loans. Keep in mind, that general underwriting guidelines disallow first time buyers from these types of programs. Don't let that discourage you, and certainly don't think that your options are then limited to conventional financing. I have advised clients in your exact position. The work around I generally recommend is using a hard money bridge loan. The downside is cost and leverage. You may not be able to get a high LTV loan with hard money but the requirements to get financed will be less rigid. The tradeoff is you'll have to bring a higher down payment. You can always refinance with a DSCR loan after 3 months of owenrship at the full appraised value. Another idea, purchase the property with a partner. Perhaps a family member, who owns real estate can partner with you to get around the first time buyer restrictions with DSCR lenders.

[Andres Ospina]

FOLLOW THE K.I.S.S method plan (keep it simple and stupid).

Find and hire a real estate agent that understands multiple investment strategies
Get pre-approved - see what options you have
based on your pre approved price - identify an area you want to invest in that you can afford
Leverage the agent to : bring you properties, assist in pulling comparables (you should know your comparables of the area you are looking in, this is for a second opinion) review and confirm your estimated rental income, assist you with acquiring the property, and have a list of resources you could use; contractors etc.

Looks at properties and make offers that work for YOU.

Also,

Do not pull your IRA money out, leave it there and let it grow - leverage this to meet your lenders reserve requirements.

Buy Multi family to hold

Buy single family to fix and flip and produce more income to buy more multi families.

[Alecia Loveless]

@Ashley Guerra Save a little longer and wait until you have enough money. It won’t take long.

[Jake Handler]

Why FHA? With the newer 5% down conventional rule, if you qualify, why not take advantage of that?