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Updated almost 4 years ago, 03/10/2021

User Stats

48
Posts
38
Votes
Derek Meyer
  • Rental Property Investor
  • Largo, FL
38
Votes |
48
Posts

50 words or less - Getting First Downpayment

Derek Meyer
  • Rental Property Investor
  • Largo, FL
Posted

A friend of mine is saving up for his first downpayment. At his current rate it’s going to take about 3 years of saving in order to come up with his first downpayment. I’m curious how others came up with theirs.

My first downpayment was a gift from a family member to house-hack a 4plex on an FHA loan (3.5% down).

User Stats

48
Posts
38
Votes
Derek Meyer
  • Rental Property Investor
  • Largo, FL
38
Votes |
48
Posts
Derek Meyer
  • Rental Property Investor
  • Largo, FL
Replied

@John Woodington it looks like he might get some help from a family member. The agreement is that he saves ____ amount by the end of the year and they’ll pitch in the remainder.

User Stats

40
Posts
27
Votes
Ashton Karp
  • Real Estate Agent
  • Bonney Lake, WA
27
Votes |
40
Posts
Ashton Karp
  • Real Estate Agent
  • Bonney Lake, WA
Replied

@Derek Meyer I think intelligence is second to discipline this early in the game. I purchased my primary residence with 0% of my own money using a down payment assistance program bundled in a conventional mortgage. If your friend wants into the game ASAP I would be more concerned about DTI and credit than savings if he has credit card debt. There's plenty of first time home buyers programs out there that will help if those are in line.

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User Stats

6
Posts
1
Votes
Brandon Dove
  • Flipper/Rehabber
  • Houston, TX
1
Votes |
6
Posts
Brandon Dove
  • Flipper/Rehabber
  • Houston, TX
Replied

@Derek Meyer

Get creative! Creative financing is a great way to come up with a little or no down payment. Now you might have to pay a higher interest rate or pay more in the long run for someone to agree to such a thing but certainly possible, remember everything is negotiable.

Or increasing income (side hustles) sell off old or unless things could be anything. Lower expenses by canceling reoccurring expenses (gym, Xbox live, Netflix, Apple Music and so on) eat at home things like that the little things add up I recommend budgeting and tracking to see where you can make those cuts. Be consistent and clear make it enjoyable and have the big picture in mind.

User Stats

12
Posts
4
Votes
Nick C.
  • Denver, CO
4
Votes |
12
Posts
Nick C.
  • Denver, CO
Replied

I run a profit & loss for my finances at the end of every pay period (weekly for me). It was the most instrumental thing to get me there. I just write in a notebook. I use personal capital app (free)

Net worth

Assets

Liabilities

RE savings

Credit score

Then:

Cut all the fat

Talk to lenders

Work 60-70hrs a week and save the money.

User Stats

9,999
Posts
18,557
Votes
Joe Splitrock
Pro Member
  • Rental Property Investor
  • Sioux Falls, SD
18,557
Votes |
9,999
Posts
Joe Splitrock
Pro Member
  • Rental Property Investor
  • Sioux Falls, SD
ModeratorReplied

Let him use your method. Either you or your family member should gift him some money.

  • Joe Splitrock
  • Account Closed
    • Rental Property Investor
    • Torrance, CA
    1,208
    Votes |
    724
    Posts
    Account Closed
    • Rental Property Investor
    • Torrance, CA
    Replied

    @Derek Meyer I worked 20-30 hours of overtime a week to save $10,000 for the down payment on my first property. I also flipped items on Craigslist. I was making $14 an hour working at Seattle-Tacoma airport, and it took me 3 years. It’s an amazing feeling to look back because now I can save that much in 3 months. Just keep going and never stop.

    User Stats

    48
    Posts
    38
    Votes
    Derek Meyer
    • Rental Property Investor
    • Largo, FL
    38
    Votes |
    48
    Posts
    Derek Meyer
    • Rental Property Investor
    • Largo, FL
    Replied

    @Joe Splitrock looks like he might have something worked out with his mother.

    I’d lend it to him except I’d rather buy another one myself 😝😝

    Account Closed
    • Handyman
    • Minnesota
    46
    Votes |
    92
    Posts
    Account Closed
    • Handyman
    • Minnesota
    Replied

    I bought a cheap mobile home on a personal loan and delivered pizzas after work 3 nights a week and a few weekends shifts. After 2 years, I knew all the best and worst neighborhoods, had a pile of cash and a paid for mobile home to sell for my down payment. With this pandemic and demand for delivery, I'm back at it again!

    User Stats

    655
    Posts
    293
    Votes
    Eric Carr
    • Real Estate Broker
    • Los Angeles, CA
    293
    Votes |
    655
    Posts
    Eric Carr
    • Real Estate Broker
    • Los Angeles, CA
    Replied

    Work hard at your job, then ask for a raise, start a side business - get really good at something, BUDGET - reduce your living costs and discontinue the non essentials, and stick to the budget, learn to invest and put every penny into something, whether stocks, crypto, or an index. Have a realistic timeline, and don't quit. 

    User Stats

    265
    Posts
    305
    Votes
    Eric Schultz
    • Investor
    • San Diego, CA
    305
    Votes |
    265
    Posts
    Eric Schultz
    • Investor
    • San Diego, CA
    Replied

    @Derek Meyer

    Play some defense by optimizing your expenses.

    1.) Re-negotiate with your providers on cell phones, cable/internet, insurances, etc.

    2.) For the short term (as I don’t promote scarcity mindset), adjust some spending on travel, entertainment, dining out, gifting, etc.

    3.) How can you pay less in taxes (legally)?

    Next, play more offense by increasing your income.

    1.) Find complimentary income streams to what you are already doing, whether it be a hobby, W2 job skills, etc.

    2.) If you are an entrepreneur, provide more value so you can raise your prices.

    3.) If you are a W2 employee, start building your case to ask your boss for a raise in the next 6 months. But, be prepared to back it up with results.

    Playing stronger defense and more offense at the same time will accelerate your savings rate.

    If that all seems too daunting then you can always study B. Turner’s Low & No Money Down book.

    There are several ways to go about this, but you need to find what path motivates you the most. Then game on!