All Forum Posts by: Donovan Young

Hello @Donovan Young!

Lots of good advice so far: I've read Rich Dad Poor Dad and First to a Million and highly recommend both. I am local to the Portland metro and have some additional insights.

When you are first starting out, an investment property that you don't live in may be harder to obtain than a house that you live in due to the capital required. The median home price in the Portland area is $536,000 and Gresham/Fairview is $450,000.

All banks will have higher down payment requirements for investors than an owner occupier.  You may want to consider house hacking, where you live in the property for at least a year (you can still have roommates), then move onto the full rental phase. You will have a more attractive interest rate (1-2% lower than an investor), and a lower down payment.

Example:

Single family house, townhouse, condo
Investor down payment minimum 15%
Owner Occupier down payment minimum 3-5% (Conventional and FHA options)

Two unit (aka duplex)
Investor down payment minimum 15%
Owner Occupier down payment 3.5% (FHA option)

Three - four unit (aka triplex -quadplex)
Investor down payment minimum 25%
Owner Occupier down payment typical 3.5% (FHA option)

I house hacked to build my portfolio in the Portland Metro (I own property in Hillsboro, Beaverton, and Gresham), and can say from experience it was easier financially to save %5 for my down payment, and move every few years than it was to wait until I have 15-25% for a single down payment.

We also have some exceptional 1st time home buyer programs specific to Oregon that can help with down payment funds for properties you will live in. There are zero incentives for investors.
For example:
Gresham Welcome Home - offers up to $40K in down payment assistance
or

Oregon Bond w/ below market interest rate or cash grant for closing costs.
Rate Advantage 6.125%, Cash Advantage 6.75% (also gives up to 3% of purchase price for closing costs).  Normal rates are 6.875% today without the Oregon Bond.

Please send me a PM is you are interested in being connected with a local lender who can talk to you about these options.

Cheers,
Melissa

 Great start! Finish up Rich Dad Poor Dad and let us know what you learn. 

Also, identify a local BP Meetup or REIA Meeting and attend one or the other and report back on what you learned/noticed

20% (to 30%) down

2 years on the job with stable income

An DTI score acceptable to your lender

Some amount of personal cash reserves acceptable to your lender and yourself.

Closing costs as in cash in the bank.

A credit rating and length of credit history acceptable to your lender.

A good deal (that cash flows) on a rental.

Stable long term renters who can and will pay the rent on time. No friends, family, acquaintances, and don't be a bleeding heart when choosing renters...it's all business--study up on how to pick renters.

and etc, etc, etc...

Good Luck!

If you're serious, spend as much free time as you can educating yourself on real estate and investing through websites like this, YouTube, podcast (especially the BP podcast), your local library, and local REI meetups.

If you don't have any, or low, credit a bank either won't give you a mortgage, or give you a much higher than average interest rate. If I were in your position I'd take the next year or 2 and save up money for a down payment and build my credit. To build credit get a credit card (there's tons of great options with lots of perks), put all of your normal purchases on it and pay it off in full every month. If you can add some bills like water or phone to the mix your credit will increase even faster. 

Depending what your income is I'd also look at how to increase it... a lot. Think about what career and income you want at 25, 30, 35, and make a plan to get there. At 19 the world is your oyster!

 "...I need to learn as much as I can about Real Estate Investing before I get a property so I know what I'm doing..."

Mostly true, but you'll also learn a lot when you acquire your first property. I would definitely take time to study and find a mentor before buying, for sure. 

Living with the rents and renting it out is a fantastic way to start! 

What books have you read, classes have you attended, videos have you watched, and/or REIs have you attended thus far? Give us an idea of your baseline understanding in regard to real estate investment.