New Member Introduction

[Roger Mejia]

Hello BiggerPockets community,

My Name is Roger Mejia, I am a 23 year old college student on track for a Big 4/CPA Real Estate Tax career. I am looking to leverage the knowledge I gain through my career to build my own Buy & Hold Real Estate portfolio and build relationships with like minded investors in the BiggerPockets and local community. To start out I want to partner with my brother and house hack a 3 - 4 unit property possibly through an FHA loan in the Providence County area then eventually move on to other markets in the Midwest. We want to get out of our current living situation as soon as possible but our hurdles are credit scores at around 500 and not having enough for a down payment until about a year from now. Are there any alternatives to financing that might work for us now, or would you advise to wait the year out. If so, are there ways to fix our credit scores faster? Please advise.

Anything is appreciated!

[Rob Thompson]

Hi Roger, I'm new to the BP forums as well but have been investing for 11 years and have a corporate background in non-profit and community development corporations (CDCs), so I thought I'd take a shot at your question.

I would encourage you do everything you can to get your credit score up while stockpiling cash (unless you need to use that cash to pay off old debts). Doing all you can might include listening to podcasts/reading articles but also exploring first-time homebuyer programs in your area. Even if you don't go through them to buy your first house, these organizations often have programs that help borrowers get their credit score up, so you might learn something new.

At the same time, see if any of your local CDCs have specialized lending programs. For example, here in Memphis, a CDC I know will periodically receive a loan from a large community bank, which the CDC turns around and loans out to homebuyers with poor credit. The bank does this because they receive badly needed Community Redevelopment Act (CRA) credit from the federal government while keeping those riskier loans off their balance sheet. This kind of arrangement is pretty innovative, so there's no guarantee that you will find something similar in your area, but you never know. Banks are always finding innovative ways to keep their balance sheet as risk-free as possible while appeasing the Feds for CRA. (A quick Google search turned up names like Lighthouse CDC, ONE Neighborhood, and Smithhill CDC in Providence, RI.)

Lastly, be patient. The real estate market, like all markets, is cyclical. We are on a long hot streak right now (the longest chronological bull market in American history according to a recent BP podcast), and there will be a cold streak that follows. It might be this year, it might be in three years, but it's coming. That's the best possible time to have cash, because it will be a buyer's market again. I'm not saying not to buy now - a good deal is always a good deal - but be patient, knowing that you're young, have a ton to learn, and (Lord willing) a long time to achieve all the goals you have and haven't yet dreamed up! Good luck to you!