From Graduation To Property Number 1 - Quickest Way To Get Started

This article is for those of you who just graduated or are about to graduate and know real estate investing is something you want to dive into right away. You have been listening to the Bigger Pockets podcast for months or even years leading up to this point and are excited to dive in now that you are earning some real money.

This is an exciting time and getting started early with a wealth building tool like real estate is one of the best decisions you can make for your future. The law of compounding is going to grow whatever investment you make now into an empire you would never believe possible. But first, how exactly do you get started and what are some good first investment options.

Personally, I believe the absolute best way to get started in real estate investing is through house hacking. House hacking is the simple strategy of purchasing a 2-4 unit property and living in one of the units while the tenants in the other units pay for your mortgage. The reason this strategy works so well for first time investors in due to the incredible financing opportunities the Federal Housing Authority (FHA) provides for home buyers like yourself.

In today's current market environment the FHA will provide mortgages on 1-4 unit owner occupied building for just 3.5% down. That means if you wanted to go out and buy a $200,000 4-plex today you would only need a $7,000 down payment. Now realistically the total would come up to around $9,000-$11,000 with closing costs but still that is an incredibly opportunity that only exists for people like you. 

But if you have spent more than a few minutes browsing Bigger Pockets forums and articles you have probably already heard about what an amazing opportunity house hacking is. The real question is what do I need to have/do to make this opportunity a reality. In order to qualify for a FHA loan you roughly need the following (Caution: these metrics are not set in stone and do change from time to time). 

1) Credit score > 580

2) Be employed full time at a job that relates to the field you studied for at least 30 days

3) Projected mortgage payment/gross monthly income < 29%

4) Enough cash to make a 3.5% down payment plus $2,000-$4,000 for closing costs

Now that you know what you need, get to work. If you don't have the credit score, get a new credit card or two and use them consistently each month while ensuring you always pay the balance when due. If you don't have a full time job yet, that should definitely be taking priority over jumping into real estate. Not enough cash in your bank account, make some spending adjustments and save up. All in all the important thing is to get started. The faster you make your first investment the faster you can reach the 50th house and the closer you become to being financially free.