21 And Looking To Make First Purchase... What Would You Do?
I'm 21 and have a decent job where i'll probably pull down 40-45k this year. I have lots of free-time and flexibility and the desire to either get into real estate or at least purchase a house. At the current time I am living at home with the folks for convenience sake, and my area (54016) is imho fairly expensive. A house in this area will start at about 140k.
If you were in my position, what would you buy and how? I plan on living in whatever I buy and have considered duplexes and quadplexes, but am unsure how I would go about getting enough credit to purchase something like this. Quadplex seems like it would run about $350k and duplex is minimum 180k.
If this isn't enough information to get some opinions, let me know and I'll supply you with whatever you'd like to know. Basically the question is, if you were 21 what would you buy?
Thanks,
Rob
go to your bank and talk to some in your loan depart say that your interested in investing and ask them for a copy of there foreclosure list they may not want to but be persistant
Hey
I am 22 and recently made my first purchase. I decided to start in low income housing. I found a good house for sale by the owner for a relatively cheap price, put $5,000 in repairs in and recruited a section 8 tenant. Now I have a house that was cheap and I am receiving fair market rent for the house from the government, which is 1150 a month for a 4 bed 1 bath. Not bad right?
Quote:
On 2003-11-18 13:09, tonygeorge wrote:
go to your bank and talk to some in your loan depart say that your interested in investing and ask them for a copy of there foreclosure list they may not want to but be persistant <IMG SRC="images/forum/smilies/icon_smile.gif"> <IMG SRC="images/forum/smilies/icon_smile.gif">
so I've seen up at my courthouse that they have a foreclosure list up on a bulletin board. would this be the same thing the banks would have? what do i look for once I get this list?
thanks,
rob
Quote:
On 2003-11-18 13:17, offsixth wrote:
Hey
I am 22 and recently made my first purchase. I decided to start in low income housing. I found a good house for sale by the owner for a relatively cheap price, put $5,000 in repairs in and recruited a section 8 tenant. Now I have a house that was cheap and I am receiving fair market rent for the house from the government, which is 1150 a month for a 4 bed 1 bath. Not bad right?
Doesn't seem bad at all... what was the purchase price for the house, and how hard was it for you to get credit? Whats your income like?
thanks,
rob
22 and ready to go? I love it!
This is what I do.
Go find that quad, and offer about 20% above tax assesed value -in our area that's the rule of thumb.
Now, in that offer ask the owner to take a second mortgage on it at 7% for three years. Now you just need to get the remaining 80%.
We only use mortgage brokers and our line of credit which you can simultaneously get via that mortgage broker as you get the loan for the quad.
A second idea is to do a lease option with the seller. Go to the lease option area and read how to do that. It's all in there.
Those two work very well.
Good fortune,
OnTheWater
I also don't know where, what, how to start.
Anybody suggest !!!
Quote:
On 2003-11-18 21:47, OnTheWater wrote:
Now, in that offer ask the owner to take a second mortgage on it at 7% for three years. Now you just need to get the remaining 80%.
Thanks for this reply. Can you breakdown this for me, I have no idea what it means. Say that the unit is listed at $350k and the tax assessment is at $280k (is this the range i should be seeing?), the offer would be $336k... how does the 7% mortage for 3-years work and what would the breakdown of costs be for that example?
Thanks for your nice reply, I'm trying to take in as much as possible.
Thanks,
Rob
Basically, you want to get your foot in the door as cheaply as possible. All the best real estate options start with finding "motivated sellers". People who "have" to sell because of their circumstance are willing to work with you and to try alternate means of transferring the property.
"Subject to" is a very good method to acquire properties for little money down. You might want to look into John Locke's e-book on the subject. There are also lots of books on the subject at Borders, B&N, etc.
Note: making money in real estate doesn't necessarily mean buying and renting. Check out the different methods and see which one is for you.
I know how you feel. I'm 23, and ready to get the ball rolling! I've been reading so much info i feel like i'm in overload. How do you break away from the courses and just "browsing the classified ads"..and start actually putting deals into motion??
I don't know the who, what, when, where, and how's either.
Its nice to see us "young folk" excited and focused about REI. Just think of where we'll be 10-15 yrs from now if we keep it up!
Best of luck to you.
I hope the books you have been reading tell you something about the who, what, where??? Talk to realtors that specialize in investment, tell them what you want to do. Find sources of credit or $$, or even think about the "subject-to" route.
Join your local Real Estate Investment club and hopefully you can find someone there to hold your hand... That is what I am doing- looking forward to my first deal- but sorry, I am a geezer-like 36 years old.
Here is a link to the REI clubs.
****Must Reach Freshman Investor status before posting URL's*** URL Not allowed****.com/real-estate-clubs/index.html
Have fun!
Hey wotan,
140k for a house is nothing =|
Talk to the people in the San Fran or LA area. I make a good dollar for my age (I'm 25) and you can't touch a starter home in my area for less than 200k. Of course your options are to go a little farther away where real estate is a little cheaper, but if you're planning on going the landlord route make sure you do all your homework (school district, taxes, etc.). If you really want to go the landlord route a general rule of thumb is that you'll have to pull in 1% of the cost of the house as your monthly rent. So if the house cost you 100k you need to get at least $1000/month in rent. In many areas this makes the landlord route very difficult. But if you're mainly trying to get started I'd recommend picking up a few real estate books, read these message boards, joining the local REIA, and get jump in with both feet. The resources to get started are out there, it's just a matter of making up your mind and being determined to just do it.
Ryan J. Schnabel
-Make it happen.
Thanks ryan... Any recos on books to get started? I don't feel that I can get 1% for landlording in this area.... not for a single-family residence, anyway.
I'll have to do some more searching.
Thanks,
Rob
Any of the Georgia people need financing give me a call770-537-1197. we have rehab loans, credit problems, no problem. Rebecca Jones Mortgage Broker in Georgia
Quote:
On 2003-11-18 12:57, wotan2525 wrote:
I'm 21 and have a decent job where i'll probably pull down 40-45k this year. I have lots of free-time and flexibility and the desire to either get into real estate or at least purchase a house. At the current time I am living at home with the folks for convenience sake, and my area (54016) is imho fairly expensive. A house in this area will start at about 140k.
If you were in my position, what would you buy and how? I plan on living in whatever I buy and have considered duplexes and quadplexes, but am unsure how I would go about getting enough credit to purchase something like this. Quadplex seems like it would run about $350k and duplex is minimum 180k.
If this isn't enough information to get some opinions, let me know and I'll supply you with whatever you'd like to know. Basically the question is, if you were 21 what would you buy?
Thanks,
Rob
21 and single...If you're making 40-45K a year, and have decent credit. Why not puchase a duplex or triplex. Live in one unit. Have the other tenant(s) pay your mortgage. You would be happy to see your mortgage note roll in every month because you know that every month you would make $$$$$. Just something for you to consider. Happy investing!! Eric
Quote:
On 2003-11-23 12:35, jonesoe30 wrote:
Quote:
On 2003-11-18 12:57, wotan2525 wrote:
I'm 21 and have a decent job where i'll probably pull down 40-45k this year. I have lots of free-time and flexibility and the desire to either get into real estate or at least purchase a house. At the current time I am living at home with the folks for convenience sake, and my area (54016) is imho fairly expensive. A house in this area will start at about 140k.
If you were in my position, what would you buy and how? I plan on living in whatever I buy and have considered duplexes and quadplexes, but am unsure how I would go about getting enough credit to purchase something like this. Quadplex seems like it would run about $350k and duplex is minimum 180k.
If this isn't enough information to get some opinions, let me know and I'll supply you with whatever you'd like to know. Basically the question is, if you were 21 what would you buy?
Thanks,
Rob
21 and single...If you're making 40-45K a year, and have decent credit. Why not puchase a duplex or triplex. Live in one unit. Have the other tenant(s) pay your mortgage. You would be happy to see your mortgage note roll in every month because you know that every month you would make $$$$$. Just something for you to consider. Happy investing!! Eric
This is exactly what I'm envisioning, I would just like to know how to make this happen and minimize the risk. Duplex/Triplex is going to run me north of $200k - $250k and I think that max rent for a unit would be about 800 -- where do I go from here? How do I find properties, what do i look for, how to I get financing for something I obviously couldn't pay for without having tenants. Will I get a loan that will take into consideration the income generated from renting out?
Thanks for all the help,
Rob
When I was in the process of purchasing my duplex the bank stated that they factor 75% of the CURRENT rental income as your income. So if the place is currently renting for say $800 a month, and you can prove that the bank will basically add $600 a month to your income.
Oh boy...I see myself when I read your post Rob.. I thought the plex things was the route to go. My goal was to get a duplex, live in one unit and rent out the other...needless to say, I went on to buy 2 houses and will put over $80k in my pocket from these 2 houses.
How did I do it, how did I start...guts. I spent a hefty penny for some education and went out and applied. The price of the education is penny's compared to what I'm making and going to be making in this business. Look into the Subject To method of investing.....learn it, understand it, do it, grow filthy stinkin rich from it.
You only need very little money to do a deal, learn how to do deals without banks.
Dude, first of all, good for you. I put myself through college and Grad School with investing. Second, it seems to me that you need some help and guidance. I have to beat a dead horse and agree with mostly everyone so far. You need to study up. But once you have an idea, please, please please be patient! Don't rush into a deal that's not worth it. One rule of negotiating that I have learned is that you have to be able to walk away from a deal. Don't get too hyped up. Once you get yourself going, and you figure out what you want to do, don't force yourself, or you'll make mistakes for the sake of preserving the deal.
Oh, one other thing... Don't let your age determine your ability. Even if you look young, a smack of confidence in yourself will make up for your age. I'm young also, (24). I used to think that I would have a hard time breaking into any industry, because of the age barrier. Don't let it bother you. Rejection will make you stronger, and as someone else said, imagine yourself in 10 years.
Good luck.
Starting points to consider. Have you saved anything from your income earned. Can your parents help you? Limited credit is possible to deal with, one way to start building your credit is to pay rent to your parents on a monthly basis. Pay them with a check and collect all the cancelled checks, this will give you a rent history, the cancelled checks will be your proof. If you don't have utility bills, get a phone or a utility bill in your name, again building your credit. These won't appear on your credit bureau, but there are a number of alt credit programs that will accept up to 3 lines of alt credit from you to provide you with a loan. FHA has these programs, fannie mae has the program to 80% and you can get in with 10% down, and 10%seller concession on their program. Also have your credit evaluated by a mortgage broker to see where you stand and what you can qualify for. The probably when be the most prudent way to start. (Note: instead of having them pull your credit, get a free credit report online, and then take your situation to several mortgage brokers, ones with good reputations, and show your credit report and see what they can qualify you for.)
Thanks for all of the great responses. I'm headed over to read about subject-to right now. I appreciate everything you guys have told me. As far as my income goes, my credit is decent but not great -- FICO 630-660 range -- and I have been making credit card payments since I was 17. I don't have all that much saved up, but I am completely debt free and have a really nice car that had a 60month loan paid off in 12 months.
I really appreciate the response on the rental income, thats exactly what I was looking to find out.
Heres another point I'd like some comments on. My friends dad who is quite financially savvy (read: rich as hell) was making a point to me that there is no money to be made in real estate because there is too much competition and the market is already so saturated with people trying to get rich. I'm not exactly trying to get rich -- I like the work that I do now, and I'm satisfied with the money -- I just want a nice place to live and not have to trade my knee-caps for it. Then again, the idea of building equity for the future really makes me want to sing, and I'm sure I would like to take any advice I could and get my foot into this thing.
Regards,
Rob
The guy who's father is rich, and said that there's no money to be made in real estate is wrong. I don't know how he got rich, maybe through inheritance, or maybe through stocks, but I can tell you this, don't get discouraged. In actuality, practically every business is saturated with competition.
I own a healthcare company, and everyday, theres something new, someone newer, better, cheaper, etc... Don't focus on your competition, focus on your company.