Age 23, bought my first property with 6% down

[Kevin Bellavance]

Hi all!

Just want first to thank Biggerpockets. These podcasts (which are so down to earth compared to those self-proclaimed guru's **BS** out there) have played a large role in keeping me motivated for the last two years when I really wanted to get into real estate but couldn't due to student life, lack of stable job, minimum wage, etc.

Anyway, fast forward a couple years, a diploma and a good job later, I just closed on my first apartment building. Here are the details :

-7 units, gross rent for 37K year. Net income of around 17K after operating expenses, maintenance, management and vacancy are accounted for. 

-Paid 375K, appraised at 400K on day 1.

-Seller financing over 5 years for 70K, 4%. Interest only over the 5 year term.

-Bank mortgage for 282K

-Cash needed out of my pocket : 23K + 3K in acquisition fees. Around 26K total. 

Total estimated ROI for year 1 (net income after interest expenses/cashdown) : 60%

I really hope everything goes as planned. I still have a few repairs to do on the building (obviously it's not new), but overall a good building in my opinion (also reassured myself with a good inspection pre-acquisition). 

So, that's it. Just wanted to share my first property story. Nothing compared to some of you who have had much more impressive beginnings but maybe if I can motivate a few beginners out there, then I'm happy with it. 

My advice : 

I've had analysis-paralysis for way too long and it amounted to nothing but stagnation. So, take a deep breath, take calculated risk and go all in. Just don't suck at maths :^) !

Now, on to doubling my asset within the next year!

Cheers!

[Susan Maneck]

Originally posted by @Duy Pham:

Hello Kein, congratulation on your investment.
I have a newbie question to ask , please hep me.
I am 22 and still in college. I have been investing in the stock market for 4 years ( I don't win but just lose a little bit )
Right now, I have about $35k in saving ( My inheritance from my parent).

With my situation being in college with zero working experience, having $35k and 780+ credit score, Will I be allowed to take a bank loan for my 3plex or 4plex investment ?
If not , do I have to really have 2 year stable paycheck to apply for a loan ?
I am living in the US.

Thank you so much and have a nice day.

My advice is to go for a FHA loan. To get that you will need to live in the complex, but they will count the other units being rented out when they figure whether you can afford the payments. Also, if one of your parents is still alive they can co-sign for the loan. They are called Kiddie-condo loans and intended for college students like yourself. And no, it doesn't have to be a condo. http://www.mortgage101.com/article/fha-kiddie-condo-loans-first-homes-young-adults