Buying my first home as a 4 unit multi family

[Hannah Espejo]

Any advice I can get here would be appreciated. I only make 50k a year. I don’t have much money saved as I only have $5,000 for everything. However I know the interest rate would be higher because of that and my debt to income is 50%. I want to buy my first multi family 4 unit and live in one. Is this possible given the situation that I am in? I don’t have any friends or family to invest with me. Would it be worth it for me at a 7% interest rate if I keep those units rented out? I want to take action and will do whatever it takes as I know Colorado Springs is a hot market. I want to get into the investment world!

[Charles Carillo]

@Hannah Espejo

I would focus on increasing your income and increasing your savings. At that time, you will be able to get a better interest rate and have a solid reserve for issues that will happen.

When purchasing real estate; one of the major issues investors get in trouble with is not having enough money. You use your savings for the down payment; what happens when a HVAC unit or hot water heater or roof needs to replaced? What happens when you are unable to rent the units for months? What happens if people stop paying? You need to have a solid reserve, or you are going to get into trouble. I have been a landlord since 2006, issues happen, and you need cash (right then) to fix them.