Moline , IL · Member since 2018 · 25 posts · 1 vote
first starting out?? I called my local bank I do business with and they say I have to establish more credit and also have 20% down to get a investment loan for property is there any other avenues to go , this kinda discouraged me but I refuse to let that stop me so any help would do. I heard Lil bit about fha loans want to learn more or how can I come at this first stage Lil better? Thanks
with no history of investing, you best option will be to purchase a property as owner occupant and house hack. this is the main way people make purchases under 20%. in fact, most banks want 25% for investment property. you will find that any loans under 20% are going to be almost exclusively for owner occupied properties
Agree that House Hack sounds like the best option. If you already have a home, you can rent your current home and move into the purchased home as a primary residence. Buying as a primary residence gives you a lower interest rate, lower insurance and starts building up credit and home equity that you can borrow on later.
With a limited track record you could get a partner on a deal, wholesale a deal until you have enough money to have a bigger deposit, or like @Peter Sanchezand @Alexander Felice mentioned house hacking.
Real estate is amazing because you have unlimited options and have to develop the mindset that you are a real estate transactor.
Let me know if you need help with anything and I would be happy to help!
If your current family/living situation will allow it the path of least resistance would be to owner occupy a 2-4 unit property. its a great way to get started.
House hacking is living in a multifamily investment property (buy and hold, typically duplex, triplex, or fourplex) and renting out the other units to cover your mortgage costs while you get to live mortgage-free or very close to it. You can get into such a property with an FHA loan and 3.5% down since FHA covers 1-4 unit properties. If you qualify for down payment assistance, there's a chance you can essentially purchase a property with no money out of pocket and not have to pay any costs out of pocket as your tenants will cover your expenses (if everything goes to plan of course).
@Jonathan Morning yes almost any financial institution will have access to all the FHA loans. Especially if you have never bought property before you would have the most luck going down that road.
FHA definitely still has credit requirements. I cant remember the exact number, I think its 580 for the 3.5% down payment program. Talk to a local lender about the specific credit requirements for FHA.