I'm young, I have a low income, I haven't purchased a house before, I have excellent credit, I assume I can make a start by getting in on incentives for first home buyers, but I don't know where to begin.
2007-01-27 04:40:13 · 5 answers · asked by Geoff 1 in Business & Finance ➔ Renting & Real Estate
Hey there, congrats on having a good head on your shoulders. Real Estate is the best product in which to invest in. That said, having been in real estate for a few years with several investments, I know where you are coming from. Here are a few avenues you can try to pursue.
1)Buy your own home with 100% financing. Talk to a mortage broker FIRST to see how much you will pre-qualify for. That will give you a good idea on how much home you can afford. Start small. Maybe even a 1bedroom condo. Think about an 80/20 loan. (You need 20% down to avoid paying PMI which is not tax deductible) The 20% of your loan may be at a high interest rate, (13%+) but at least that will be deductible. Buy your home, live in it, and think of your mortgage as money in the bank plus interest. you will have equity into the home as well as the home will appreciate in value. That is the slowest but safest route.
2)Fix and flip. You have excellent credit which is good. What I did with a home (Risky but if you can stay on top of things) was bought a very cheap rundown home and used all of my credit cards to pay for fixing it. (I had 17 cards maxed out at one point) That can net you 10-15k once you sell it. However, you need a good mortgage broker, a really good contractor, and a really good real estate agent. The agent and contractor is key to making money. To do this, do your homework, look at what homes cost in your area. Research the Real Estate market trends in your area. Tell the people you want to have work for you what your plans are. See what they say.
3)Buy and rent out. I like this option the best. What you need to do is find a small home, particularly a condo. Find a good management company (They are key to making a profit) to manage it and rent it out. I like condos because there is less that can go wrong AND the maitenance fees are tax deductible. Talk to a lawyer or an accountant and set up a company to place your condo under. That will protect you from lawsuits. Also, buy a 2 bedroom. They are easier to rent out. If you can come up with 20%, the bank will pretty much bankroll the rest of the home. It doesn't have to be expensive, just clean.
Anyways, I hope this will get you started. Do research like you apparently are doing on the net before you take the plunge. Start small so if you lose, you lose small. Don't worry about losing because that is how you learn. I have lost thousands of dollars before I started making money, but my losses were the best teachers I ever had. Don't be scared. With enough knowledge, you will make the safest (Though never risk free) decisions.
2007-01-27 05:17:18 · answer #1 · answered by Kenneth C 6 · 0⤊ 0⤋
If you have excellent credit, you can get 100% financing on your own home, but you will still have to be able to make the payments. You will have a higher rate at 100% and being a first time home buyer, and you can reduce your payment by putting some money down. You will also likely need to have several months of payments in the bank, plus closing costs. You can contact a mortgage broker or a bank to find out how much you can afford to buy, and then find a home or condo that fits that price.
2007-01-27 04:49:17 · answer #2 · answered by moonman 6 · 1⤊ 1⤋
Consider using a construction loan to build a plex. (I can write this loan) < shameless plug. You use your good score so you dont have to prove income etc. and you build your new plex which will not need any major maintanence for years. I would (when it is dont being built) move into the property and get owner occupied financing on it. Live in it for a year or however long you like. When it is done being built you should have 10-15% equity and be able to secure financing for it.
Or find partners?
2007-01-27 06:39:47 · answer #3 · answered by camrenalexis2 2 · 0⤊ 0⤋
With low income it's best to wait until you have a little more money to work with, such as a better paying job. Otherwise, you will strap yourself financially to a home and that is NOT a good thing.
2007-01-27 05:01:46 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Find a Mentor.
2007-01-27 04:46:50 · answer #5 · answered by smiling_freds_biz_info 6 · 0⤊ 1⤋