All Forum Posts by: Ty Ash

Hi @Hochi Yang!

I ran into a similar situation as you when I first got my start.

I went to a bank and said that I'd like to do a lower than 20% down mortgage for duplex that I wanted to buy and rent out the other side. They told me that kind of product doesn't exist. Turns out, that bank just didn't have what we were looking for so when we started asking around, we just found another lender who had the product we needed which ended up being an FHA loan for 3.5% down.

Lesson learned: Sometimes vendors withhold the information hoping they can keep you in their products as opposed to just helping you out and potentially pointing you to a competitor that can serve you.

Can you clarify if you or your partners are going to occupy the property? That will definitely determine the type of financing that you should be asking for. If you want, give me a call as I'm in Wisconsin as well and might be able to talk through some options with you!

Otherwise, best of luck in getting your start with REI!

Hi @Jesus Ramos!

A few other members have already called this out but definitely look into getting started with a house hack. I think that you'll also find a lot of value in listening to the BiggerPockets Money podcast to learn more about financial independence. It sounds like you're already well on your way but they (@Scott Trench and @Mindy Jensen) consistently talk about the 4 key levers in personal finance. Earn more, spend less, build a business, invest in assets (real estate fits into the last two levers but you're also working on your apparel business as well).

Next steps for you are to keep learning (Read Set for Life), interview a few investor friendly agents, and start analyzing deals that fit in your purchase price!

Best of luck, definitely keep us posted on your progress!

Hi @Account Closed!

A ton of great of advice already from @Nathan Gesner! I'll add a few things too based on what I wish I knew before I started investing in real estate:

1) I wish I had dove more into my personal finance education earlier. I would definitely go check out some FI (financial independence) podcasts like BiggerPockets Money to spark some additional research. Real Estate investing is a portion of your total finance picture so I really recommend starting there!

2) Start learning now but once you are financially in the position to take action, do it! It is all too easy to think that the next book or podcast is going to have that one thing you need to finally get you ready to pull the trigger. You'll hear it time and time again here, take action, know the risks, and learn from your mistakes. Side note, you never stop learning so you might as well be taking action along the way.

3) Start building your network. You can't invest alone. You'll need mentors, lenders, agents, contractors, and many other people to help you on your journey. Now's a good time because you're young, willing to learn, and full of energy. People will invest their time into someone who shows their passion.

Best of luck and looking forward to your "First Deal" post in the near future!

Hey @Edwin Aguilar!

I just had some FHA house hackers close this month here in Milwaukee and a few more on the search! @Nick Riccio is spot on that you're more than likely going to lose out on a few opportunities before getting the accepted offer but it is possible! Here are my thoughts:

1) Try to find a "nicer" duplex that maybe just needs carpet and paint as sometimes sellers get nervous with accepting an FHA offer due to the Appraisal calling out safety items like peeling paint.

2) Since you're going to need more opportunities with how competitive the market is regardless of where you're looking, make sure you work with your agent to see how many homes have SOLD in your criteria in the past 3 months to give you a reasonable estimate of how many opportunities you will get in the next 3 months. Run your numbers off those sold comps.

Best of luck on your search! Stay positive and keep taking action throughout the process as it will be challenging at times!

Hi @Ryan Hasan,

Totally understand you want to do some research and don't want to bug the agent you've chosen to work with. I'd personally like my clients to reach out so that I know that they are serious and continuing to take the next step in the process over time so that I can make sure to assist them along the way.

However, if you'd like to be more self sufficient and are trying to run some numbers in an area you've identified, try this. Go to any free real estate listing site like Zillow. Search the neighborhoods that you'd like to invest in. Change the filters to Sold, Property Type you're looking to invest in (single or multi for example), and then update the "Sold in Last" in the more section to 90 days. This will give you some really good data to explore:

1) What the investments you're looking at are actually selling for vs looking current inventory that's being listed and going well above asking in less than a week in most markets. This gives you a more realistic purchase price.

2) How many of those properties sold in the last 3 months. This is how many opportunities you can expect to have in the next 3 months in that neighborhood within your criteria. This is your "funnel" that gets mentioned in the podcast all the time.

Take a look at your target area and let me know your thoughts. Is your criteria realistic or should you move your focus elsewhere? Did your agent arm you with this kind of information to set your expectations? Best of luck and hope to hear back on how you're investment journey progresses!

Hey @Alejandro Cuevas! Glad that you're getting involved in the forums and working on educating yourself on the process which is absolutely the first step!

Like @Marshall Leipprandt mentioned, it's time to start building your network by attending local events or by reaching out to other BP members in the area that you want to invest in. It sounds like you're at the point where we all have been. It's time to start taking action! I would do the following having been in your position:

1) Identify what you want your first investment to be (house hack, buy and hold, etc).

2) Interview a few investor friendly agents which you can find on BP ("Network" dropdown) and get access to the MLS to give you properties to analyze.

3) Practice analyzing some deals and bounce the numbers off us here on BP or off the network you're starting to build in your area.

These are all things that you can get done this week to get out of just listening and reading and into real life and taking action where you will really start accelerating your learning. You're at the point where you need to apply what you've learned so far to really get it to stick! Best of luck and I hope to hear from you soon on the progress you're making towards your first investment property!

Hi @John Barkenhagen (JP)!

Welcome to the community! I think that you'll find that you're not alone here on BP in loving numbers haha. @Aaron L., that's a very cool resource, I'll have to pick up the book. I have two thoughts here that are maybe a prequel to answering your question of "how do I run the full lifecycle of an investment to find out if it will work or not".

1) Make sure you're working on your total financial picture, not just investing (and you may have done this already). Many have said that the BP Money Podcast is almost the prequel to the investing podcast. I think that Scott Trench's book Set for Life has a good framework and they always focus on the four levers you can control in your personal finances. Earn More, Spend Less, Build a Business, Invest in Assets (Real Estate fits into the last two levers).

2) I'm a big believer in the idea that the management of any deal is the key factor in your success as long as the deal was bought correctly initially. Obviously that's the scary part because if you fail, it's probably not as much the investment you chose if you ran the numbers but your own lack of knowledge, network, or experience. You'll have to start somewhere and you need to pick something that you believe in and are potentially passionate about. If you like an asset class you'll be more likely to learn more about it, talk about, and want to buy more of it over the long run.

Hope that this helps without directly answering your question! Best of luck and here for you if you have more questions as you dive in further!

Hey @Will Morehead!

Looking forward to you locking down your first house hack! Again, I also agree with the other contributors on this making sense to improve your living expenses right off the bat. I believe that you need to look at house hacks in two ways. First, will this lower your monthly living expenses once you move in. Second, after you move out, does the property cash flow or in all honesty I'm personally okay with breakeven with how competitive this market is. Here are my thought process for numbers on a house hack:

1) To make it super easy, take collected rents - monthly payment (PITI + PMI since I see that you're using FHA), - your utilities. If you are have a good spread between your current rent + utilities and this number, you're good for step 1.

2) Run your numbers as a post move out rental. This sheet you used should be perfect for this but please make sure you include management fees as an estimate for the future "move out" analysis even if you think you want to manage it yourself. At the very least, this adds buffer and at it's best gives you options.

3) Pull the trigger. If the above are true, there's an opportunity cost of you waiting with saving on monthly living expenses, appreciation over time, depreciation, and really starting to learn by doing your first deal.

Keep on learning and asking questions! Make sure that once you start saving on monthly livining expenses that you start building out your reserves (read Set for Life by Scott Trench for a good framework on "Runway") Here for you if you have any more questions!

Sounds like your main question is getting pre-approved. I'd recommend finding a local lender and meet ups are a great place to find out who is other investors recommend in your area. If you haven't found an agent yet, you may want to start there as they may have someone they trust to close deals and have the products you're looking for. Ideally if you all meet the requirements, you all might be able to qualify for a 5% down conventional product on a 2-4 family instead of using FHA which a lot of times will soften your offer based on seller/listing agents opinion. Reach out anytime directly!

Very excited for you @Connor Lewis! House hacking has made a huge impact on my finances in a positive way and I'm excited for you to get started.

Lot's of great of advice already in the thread but my top 3 tips are:

1. Keep educating yourself by reading (a few good book callouts in the thread already), listening (BP podcasts and Financial Independence podcasts), and work on building your local network.

2. Know your math. I love house hacks because if you're living expense will be lower than what it would take you to rent in your market and you're able to get to at least breakeven post move-out, you can confidently pull the trigger!

3. Treat it like a business. Start working on your processes and systems while you're still small and get ready to buy more to create your own "snowball".

Best of luck and I'm looking forward to your update once you close on your first deal!