How Can Involved in Rental Properties with low money down?

Question

Hi All!

Been away from BP because at my day job they basically block any site that does not deal with IT and their corporation :-)

So my fiancé and I want to start getting into rental properties, preferably multifamily homes. However, I am afraid that we would have to save about $30-$40K just to start even thinking about it.

My question is, can we start getting into investment properties with just say $1000 dollars?

What are the common gotchas and pitfalls with that?

Tony Gonzalez · Answer

Thanks for the tip @Elizabeth  Colegrove we don't have any property, in either of our families, that we can just turn over to rentals, but it we'll keep looking. BTW, really enjoyed perusing your site, some tips I can definitely put into practice ASAP!

Curt Davis · Answer

There is always some cost associated regardless of how great it seems.  I have purchased 20 rental homes for myself and my wife and I used the hard money to refi model and all of them were zero down up front but then I had monthly interest only payments, appraisal fees and there were a few homes that the appraisal came in a little short making me bring a few grand to the table.  Still much better then 20% - 25% down + closing cost each time.

I actually did a short YouTube video on how this strategy works.

Good luck

Joe Fairless · Answer

@tony

@Tony Gonzalez I know @brandon

@Brandon Turner has a fantastic ebook on No and Low Money Down techniques. I highly recommend checking that out.

Account Closed · Answer

@Tony Gonzalez

Just curious, are you looking for multis in Jersey City or vicinity?

I really encourage you and your fiancee to buckle down and save $ first. I know no one wants to hear (read) that and could be somewhat unpopular with folks that do no or low money deals.

Assuming that you already have 3-6 months of emergency savings already (in case of job loss, medical stuff, whatever...stuff happens), you might want to save some more $ to act as reserves for your future investment. Even if you do no or low money down deals, you will need some sort of $ in reserves in case of repairs, etc. Especially, if you're going to have tenants. You might be able to live with a drippy faucet in your unit, but maybe your tenant might not. That's just a simple example.

Even if you buy turn-key or new construction - who knows...repairs might be needed due to accidents, not necessarily age of property. Accidents can happen the day after you close, or 3 months down the road.

I've heard of kids flushing toys down the toilet.

My upstairs neighbor was filling her bathroom sink up to wash a sweater one night (fancy sweater, I guess) - she turned on the faucet, sat down in front of the TV to wait until the water filled up, forgot about it and guess who found water streaming out of the medicine cabinet? Yep, yours truly.

Tony Gonzalez · Answer

Hey Account Closed

we are looking for MF properties in Bayonne, Jersey City, Hoboken, and Weehawken. I definitely feel like we need to build up our emergency savings beyond just a month of salary (I work as an IT contractor and my fiance is a photographer), Guess I was hoping to jump into the game as soon as possible.

Do you do alot of deals in this area? Looking forward to learning from a seasoned investor...and if you need any IT support, I can definitely help :-)

Tony Gonzalez · Answer

Thanks Kyle Penland ! I am planning on talking with my bank to discuss small properties like that, though they may be tough to find in Jersey City. Looking forward to learning more on how you did that :-)

Tony Gonzalez · Answer

Thanks for pointing me in the right direction @Joe Fairless , just bought the book.

...seeing that you have a portfolio worth $7M, I can definitely see that you put the skills to use :-)

Let's connect

Elizabeth Colegrove · Answer

@Tony Gonzalez

Glad you enjoyed the site! Our first rentals were long distance since that was what we could afford! In my experience there was no "right or wrong" way to get started! Just important to get started ;)

Account Closed · Answer

I know an investor in KC who just had a buyer get into a house with virtually zero down. FHA I think. We can argue whether this is good or not (didn't we just have a crash?) but it IS happening again.

Here in my market in San Antonio, we have hard money guys available that do 9% loans for 30 years! Not that you would hold it for a long time but it does give you some buy hold options.

Dustin Rose · Answer

Hi Tony. There's always ways to get started. Just like a couple people mentioned there's several creative ways. The easiest way I know of is to find a deal and bring it to investors. Either partner with them ( with your percentage coming from finding the deal- not putting any money in) or have them pay you a fee for finding the deal. After a few deals you could have plenty of money to get started.

There are also companies that will pay you a large referral fee for referring investors for purchasing their turn key properties. Again after a few deals you could be starting your own personal real estate investing career.

How Can Involved in Rental Properties with low money down?

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