Student, No Money, How do I buy a house?

Question

I’m a 22 year old Civil Engineering Student and right now me and my girlfriend pay $1050 monthly for rent. I’m tired of sinking my money into rent knowing I’m getting nothing out of it.

I would love to buy a house with a basement apartment that I can rent out, there are a few in my area.

The problem is, I have no money for a down payment and would likely be turned down for a mortgage anyways. Even though I have decent credit, 783, my only real income is a part time job besides scholarships and student loans.

What are my options finanlly for achieveing my goal of purchasing an owner occupied rental property in my current situation.

I would love to hear any advice you all have to offer.

Account Closed · Answer

Okay, you opened the door  . . . Here's sound advice. Marry the girl, finish your degree without adding more debt, save your money and buy a home. That has worked for millenia.

Josue Vargas · Answer

I believe you can do this if you have a co-signature in your loan (i.e. someone close to your family, your father, mother, etc) or a "partner" that must meet the minimum requirements such as sufficient incomes, credit score, etc.  The combine credit score and income will then be evaluated.  Or, you can basically have someone to be responsible on behalf for the loan.  No most people, even your close family may do this because it eats up their credit availability, plus is a big risk, similar of what lenders and banks think of it.

I'm a Professional Civil Engineer, and I believe you will do good in the near future.  Do not precipitate before focusing in your career, first take that Bachelor degree, then become an EIT, and then finally become a PE where the big $$$ and career is with a very good/stable job.

I started in REI when I had to take a personal loan to build two beach apartment in conjunction with my dad, just right away from graduation day!  I had an OK job by all standards, making enough for living and paying my bills and with a 7-year personal loan with 13% interest rate (back in 2005).  Now, this apartment is paid off long time ago, and have bought another 5 properties since then, looking for another one next year.

Is good you are thinking about how you can switch from an expense (rent) to something you can turned into investment.  But honestly, you are too young and you have a great future in your career.  Not saying you can not do it, it is just a little bit difficult now with your student loans and the time needed to be able to be a Great Civil Engineer!!!!  You can do both, but this is just my opinion, focus on your career first that ultimately be your golden door to be able to get great/large loans with a very good interest rates/deals and invest accordingly!

Alex Kearney · Answer

@Josue Vargas thank you so much for the advice

Todd Root · Answer

@Mike M.

I agree with you.

Thomas S. · Answer

Buying with no money can be done but it is a really bad idea. For now as a tenant, you are living the most affordable life style assuming you are frugal in your choices. Home ownership is a life style choice not a investment, it is best to hold off as long as possible buying a personal home. Get your personal and financial life established before you get tied down to middle class thinking.

Don't get married until you have achieved your personal financial goals. Marriage is highly over rated. Ask any one of the 50% that are divorced.

Jonathan W. · Answer

@Alex Kearney I could get really preachy and You can pick up any real estate book that can summarize how to get a house without a down payment an such. You technically have those options.

a  close friend had the same thinking as you but he grew out of it

Firstly, yeah you are getting something for 1050$ a month. Four walls an a happy home, don’t take that for granted. Secondly, yeah your not building equity and your spending plenty on rent but ask yourself what’s going to make you more money, working on your career and increasing your income, or stressing out about a room or house that would increase your debt all for a measly 600$ extra a month and some equity that you could hold a lot faster if your main source of income was higher... the first response is basically saying the same thing. ..

Caleb Heimsoth · Answer

@Alex Kearney finish school.  Get a job.  Then buy a house.  Don’t worry about this now.  Of course you’ll soon realize that buying a house puts you in a sort of middle class trap as well if you buy too much house.

Personally, I’d graduate, pay off student loans and wait 3-5 years to buy a house

Michael Noto · Answer

@Alex Kearney Take this time to save money and learn the business. This way when you get a job and are bankable you can hit the ground running.

Louis W. · Answer

Okay, you opened the door  . . . Here's sound advice. Marry the girl, finish your degree without adding more debt, save your money and buy a home. That has worked for millenia.

This. except for the marry part. That is your personal decision. Marriage can be a huge financial drain if done carelessly. While you are finishing school, spend some time daily to learn about Real Estate. Reading all the guide and top discussion on BP is a good start. Then, find some Real Estate professionals that you can meet in person to learn from. Avoid people that are trying to sell you stuff like Real Estate course and investment deal. Offer something of value to the gurus besides money. Eventually, you will have the knowledge and finance to do your first deal. Finally, great deal takes hard work to find, not something a random sale person brings to you.

Quincy Lockett · Answer

You are getting a roof over your head for $1,050. You have to live somewhere. That’s a fallacy that renting is ‘throwing your money away and making the landlord rich.’

Student, No Money, How do I buy a house?

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