All Forum Posts by: Account Closed

@Naveen Desai Thanks for chiming in!

I would definitely use a PM to manage the property, and I will make sure to factor that expense into analyzing the deal.   What additional costs would result from investing out of state vs. locally, aside from the PM expense?  

@Walt Payne I see where you're coming from.  I forgot to mention that I would be looking to purchase out of state, possibly Illinois, not in CA.  Sorry I left that out.  I agree that finding a solid property at $55k in CA would be a major undertaking, if not impossible.

@Joseph Zanazan Thank you for the advice and insight into my situation.  I'll make sure to get started on my reasearch.

@Walt Payne Thank you for the info about private lenders, I think I just assumed the rates would be higher.  I hadn't even thought about a business loan from a credit union (or small local bank).  I will definitely pursue that option.  I am going to school in CA, perhaps you could elaborate on why that would present an obstacle?  Thanks for sharing your experience with qualifying when you were not approved at big banks, it is nice to know that I still can make it work. 

Thanks to both of you! I appreciate you taking the time to write me a response.

-Hudson

I am trying to get the ball rolling to purchase my first property.  However, I am currently a student and do not have any stable, monthly income.  I have been trying to find out whether or not I will be able to qualify for a mortgage given my situation.  Yesterday, I spoke with a mortgage representative from Wells Fargo and he said I would need 25% down (not a problem) and at least $1500/month in order to qualify for a low 5% loan on a $55k duplex.  Correct me if I am wrong, but I suspect that I will not be qualifying for financing through any large banks (ie. WF, Chase, etc).  This presents a problem to me as I am eager to begin investing, but I am not looking to do an all cash deal at this time.  Currently, I see my options as follows: 

1) Wait-- Obviously, this is not ideal as it would be 2 years until I graduate and enter the workforce.  However, it may be necessary if it is mandatory to have some form of reliable income. 

2) Cash-- Feasible, but I would rather invest $13,750 (25% down) rather than $55,000. 

3) Small, Regional/Community Banks-- I do not know if this would be an option.  I have not reached out to any to see if they would be willing to work with me, or if I would meet the same response as I did with Wells Fargo.

4) Private Lenders-- I know that private money lenders are more willing to take higher risk (ie. investing in someone with no track record or income), but at higher interest rates.

5) Owner Financing-- I would imagine that it is harder to find properties where the owner is willing to finance the deal, let alone a deal that is worth doing.

I would greatly appreciate advice from investors who started out young (in college) or started without any monthly income.  Thank you!

Hey Riky! 

I'm in a similar spot as you.  As a college student I have no stable, monthly income and as a result I am finding it hard to finance my first property.  If someone who was able to finance their first property without any monthly income could chime in that would be greatly appreciated.  

As far as little to know down, there are several options that you might want to consider.  Check out the Bigger Pockets podcast with Ben Leybovich as the guest.  He is an expert in financing property with just a few thousand down.

@Vipin Aggarwal

Welcome to BP,

I'm from the South Bay, not quite OC but close!

Good luck to you

Hey @Landon Elscott

Good choice not selling the Mustang! I love mine and would never even consider selling. Good luck with the close of your first property!

Thanks for the clarification @Michele Fischer

I don't think that would be something I would encounter as I would most likely be using a property manager as am looking out of state because investing California requires more capital than I am willing/able to invest. However I do see that being an issue with some tenants and it is interesting that you have issues with it. Thanks for the info!

@Richard T. : Thanks for the input. I think that is good advice not only for RE but for personal finance in general.

@Michele Fischer : Thanks for the suggestion for $2k+ in reserves. Would you mind expanding on what you mean when you say that it would be a good idea to increase credibility at a young age? I guess I'm asking, in what situations would age be a disadvantage. One that comes to mind is applying for loans, but I'm sure there may be others. Thank you!

Great advice @Dawn Anastasi

I am in a similar position as PJ and I was wondering how much cash you would recommend having in reserve for a "rainy day" when you need to make a repair on a property in addition to a down payment of approximately $10k. Thank you!