Hi BP community!
I wanted to share an experience in my real estate journey in hopes of inspiring some folks who are just starting out and getting their feet wet. I've always wanted to invest in multi-family real estate but never had the time nor the financial means to make it happen. Luckily, I found out about the Bigger Pockets podcast less than a year ago and began visiting the website to learn more about real estate and grow my investment portfolio. In addition, I also read Brandon Turners "Investing in Real estate" book to gain more knowledge on rental properties. My goal was to understand everything about real estate so I could handle big problems if they arose.
My next plan of attack was to research a few mortgage lenders to see what I could be approved for in a multi-family property. Ultimately, because of my self employment history and spotty income I had a difficult time getting pre approved. The lender could only approve me for $50k which in my market doesn’t afford you much. I spoke with my mother at the time and she suggested if I made an effort to make more consistent income and save up $20k I could approach my father about cosigning my loan. For 6 straight months I hustled and made a determination to save all my money for a down payment. When I finally reached $20k I approached my father and explained to him why investing in real estate would be a wise decision for me to build wealth. I broke down what my expenses would be every month and shared my finances in the event problems arose. I wasn't quite sure how my father would react, but to my surprise he said yes and I can't tell you how happy that made me feel.
After getting the thumbs up from dad, I spoke with a few mortgage lenders and ended up getting pre-approved for my first duplex! I went with Finance of America if you’re curious. It wasn't easy and I had a few obstacles along the way, but ultimately I figured out a solution and pushed forward with my goal. Finance of America agreed to give me a conventional loan with a 15% down payment and 3% interest rate. I had to house-hack the duplex in light of the loan terms.
Their financing offer changed my plans because originally I was looking at an FHA loan with only 5% down. So I went back and continued saving more money to reach a goal of $40k. During this time my father and I looked around at a few duplexes in the area. I had begun my search at a time in real estate where everything was inflated and prices were soaring. I eventually found a place in the right location, the right price and I got an accepted offer! The reason why the sellers ended up agreeing to my offer was I let them stay in the house for an extra month. This is always a good strategy if you're looking to buy properties!
After buying my first duplex its made me realize how you can accomplish anything in life if you’re determined and goal oriented. It’s certainly raised my confidence level and helped me focus on what I want out of this life. My plan is to save for another duplex next year and house hack it. I’m so incredibly grateful I accomplished my goal without anybody’s help or money. I saved all the money and the house is in my name. What a wonderful feeling!
Never give up!
-Miles
