Best Beginner Cheat Code for Househackers

[Mason Vitalis]

The main obstacle beginner investors seem to be running into in the Minneapolis market is coming up with that initial down payment on the first property. It's not easy. Especially with the spring market kicking off and relatively high interest rates, it's very difficult to out save the market. This is why I am a huge supporter of down payment assistance. Many new investors don't know this is even an option, but it can be, in many cases, the answer to their biggest problem. 

Essentially if you make less than $140k per year, you can most likely qualify for some form of DPA. Sometimes upwards of $18,000! This is a major boost for those who don't have thirty grand laying around for a 5% down payment. In some cases, the down payment is even less than the DPA. That coupled with getting the seller to cover commissions and closing costs, and you could potentially get into your first investment property for $0 out of pocket. I've even seen investors who get a credit at closing. Imagine not only getting into a property for nothing but also getting paid one or two thousand dollars at closing!

It comes at the cost of basically a second mortgage with the same or sometimes lower interest rate as your primary loan. This means adding somewhere in the neighborhood of $100-$200 to your monthly payment. All you have to do is find a deal that cash flows or just breaks even with the extra expense and live in the property for at least one year. Then rinse and repeat to become the ultimate serial househacker! After four or five years you could have a few thousand coming in per month in cash flow and hundreds of thousands in total equity in your portfolio. This is when things really snowball.

Now is when you could redeploy that equity in a cash out refinance or 1031 exchange to fund your next deal. And the next and the next and so on. This strategy creates what I like to call an "equity farm", a foundation that funds your entire portfolio. And it all started with basically nothing out of pocket.

I know it works because I've seen it happen dozens of times with many new investors. It's a tried-and-true process!

Who out there is ready to take that first step toward financial freedom with this strategy?

Shoot me a DM if you'd like to talk more or get in touch with an investor friendly lender in the Twin Cities. You could also find one right here on BP through the lender finder. Just ask them about down payment assistance and see how they can help you.