How will I go about buying a rental property with 40k in NJ?

[Jovensky Fenelon]

I’m trying to buy a rental property around this time next year. I would be 21 and will have 40k to invest in a property in New Jersey. I’m try to find the best way thank you.

[Account Closed]

@Jovensky Fenelon with $40k to work with FHA loans are probably going to be your best bet. I'm using an FHA 203k loan for my first property, which rolls rehab costs into the mortgage with 3.5% down. This means that theoretically $40,000 will get you into a $500k property with $17,500 down and leave you with $22,500 for closing costs and reserves. The catch is you have to live in the property for a year. So you could either get a 2-4 unit multi family and live in one of the units or rent out a single family by the room.