All Forum Posts by: Joe B.

+1 to house hacking. Pretty much your best option. I'd be interested to see how you got pre-approved for a loan on a 20k w2.  Credit score and investments are nice, but there still has to be income and you don't appear to have it.

There's a lot of good advice in this thread, but I'd like to add some more. Your best bet when it comes to finding good, quality advice is to solicit it from people who are making it happen in your geographical area since REI is so local. However, as someone who was born and raised here in Wilmington and now invests here, I can say that the first thing I noticed is that the majority of your comments are very negative about the area. Which doesn't really inspire those of us who work and invest here to want to help. In particular, I can't help but notice the comment about how you're from NJ "where people hustle," as if people don't in Wilmington. Since 20k a year is about half of the median income for this area, I'd say you're not hustling.  I'd recommend you take another side job or perhaps switch careers entirely to get your reserves and income up to get the ball rolling.  You can certainly invest with little or no money down, but it definitely helps to have more seed money.

I notice you also mentioned "no experienced investor I know of." There's a local REIA full of investors. And there's a ton of us locally who buy and hold, flip, etc. I think you've decided the area stinks before really doing your homework.

 The main concern is that 25K will get a nice down payment, but it won't let you have a nice "cushion" for mistakes, repairs, closing costs, etc. You could always find a cheaper property, but I wouldn't recommended it here in Wilmington. You want to stay 120K above to stay out of the trash.

Being an owner occupant will allow you to have a %3 down FHA loan that has a super low rate and will put you into nicer investment territory. After you live in it the first year, you can move out (but not have an FHA loan unfortunately) and do the same-thing with another property. And like you mentioned before, you can rent it out to your friends and you many even get some nice cash-flow while you live in it.

This is actually what I'm doing right now as I save up for my next investment (I'm 26 too lol)

@Joe B. - I noticed that you said your job is part time. Any hope for getting hired on full time? 20k/year with a masters degree isn't an ideal situation. Its going to be incredibly hard to get started in RE from a DTI standpoint. I know that a lot of people on BP are gifted with being able to get into RE without significant investment/income, but my experience in RE has shown me that it takes money to make money. A lot depends on your attitude, drive, available time, and ability to network. Jay's advice on becoming a RE agent is a good idea. Great way to get into the industry without having to wait until you can save up enough money to buy a place.

30k could get you a property, but you have to consider capital expenditures (HVAC goes out, roof replacement). You're 26, OP. If you have decent credit and this is your first house, I'd consider being an owner occupant for the first year and buying another as you get more into a career.

There's some pretty cheap investments around here, but you gotta watch out cause there's crap too.

you will have a hard time getting a loan making 20k a year.       Maybe you need to work a less desirable job that pays more for a while

Do you have a decent investor community where you are? Is there a group you can get involved with?

This business is hard, and it's getting harder to find good investments. There are lots of signs of a coming correction (BiggerPockets having 4 bazillion members being one of them). 

My oldest son is 22. He makes more like $45K/year, so he has more free cash than you do, but not that far off. He saved $10K over a couple of years, and we've partnered on our first deal. He's investing and learning, and I'm doing most of the work.

If there's an experienced investor that you can learn from, and trust, maybe look for a situation where you do legwork and can invest in a portion of one of his deals?

What you should do first is determine your priorities.

If I were you my first goal would be to job hunt a better paying job. To do that you will need to move. That should be priority one. Once you do that you can then begin to invest anywhere in the country that makes scenes, possibly back in Wilmington NC.

Time for you to cut your apron strings, if that is why you are living and working where you are, and join the real world. There is no good reason for you to be living where you are ( Only moved here because my parents did). What is the logic behind that life decision ?

Hi Joe,

Are you looking to obtain traditional financing through a bank to get the loan? Most lenders will want to see 20% down on an investment. May be tough to buy based on your DTI (debt to income ratio) they'll use based on your 20k income. That said, have you thought to simply buy a primary residence and then house hack? You could qualify for less, need less money down, etc. but could get roommates to help with cash flow and could also decide to rent your property out after a year or two and hold that one as rental. That strategy was exactly what I did when I first started out. I kept my first home as a rental and took my roommates with me to the next primary home I purchased to move in. After a couple years, I moved again and kept the 2nd as a rental (including the 1st). It's a great strategy especially if you don't have a high paying job since it's much easier to qualify for a primary loan (with less down as well) than it is for buying a rental home outright.

As for a single family vs condo/townhome, there are pros and cons to each. Generally, in most markets and areas of a city, single family homes will tend to appreciate better than a condo/townhome. They'll have more capital costs over time as well but then again, you wouldn't have an HOA cost to deal with. I have rentals with both. I'd say it really boils down to what you want more of, appreciation over time or cashflow. You can get both of course but one or the other will have a different balance as will the area you buy in...