Is 10k enough to start in Pittsburgh area?

[Billy Musto]

How much capital is needed to start investing? I don’t plan on living in this investment and I’d like to get a duplex/triplex. Can I put 5% down to keep some of the cash liquid?

[Jake Tovey]

Technically, yes, $10K is enough especially if you live in the property for a year or so. I’d recommend saving up a little more than that but you can definitely buy a property for under $10K down. Just means you may have to hustle more but doesn’t mean it can’t be done. 

Tips:

- Use either FHA or FHA 203K loan

- Negotiate full seller assist (6% of purchase price)

- Buy a property with tenants in place, close on the 1st/ 2nd of the month (You’ll get the full rent credit for first 2 months before your first mortgage payment, seller will pay the pre-paid interest in closing costs)

       - Ex) You buy a triplex that currently cash flows $3000. You close July 1st. You move in August 1st into a unit producing $1000/ month, so you’ll only receive $2,000 in August. First mortgage will be due September 1st. You’ll receive $3000 (July Rent) + $2000 (August rent) all before your first mortgage is due. That can really help get you started.

- Negotiate as many big ticket costs in at closing and make sure to get a home warranty to help minimize impact of big costs year 1

- Know you’ll have to spend about $1.5K out of pocket for every property you are considering during due diligence (Home inspection, appraisal, sewage inspection). More for 203K loans.

- Get help running the numbers on properties in the area and don’t stop analyzing deals until you feel confident in your numbers. Also go in understanding that you’re not going to find a perfect deal with little money down. Look for one that needs some sweat equity, have some vision for it, and understand it’s up to you to bring a property to its potential.

- Message me for an awesome agent/ mortgage broker who helped me out a ton with my first purchase.