Should I buy a Condo, House, or Multi-Family|How to Get Started In Real Estate

Advertisements

When I started my first time home buying process, I questioned myself whether or not if I wanted to move into a condo, single family home, or multi family.

Here’s what it came down to. I wanted to move into something that wasn’t going to need any work that was one. With houses, they typically require a lot of handy work, meaning you may need to replace some fixtures, in a few months time you may need to replace the roof, or the siding. There’s a ton of things you may have problems with. Houses are typically more expensive than condos price wise, monthly payment wise, single family’s are generally cheaper. You don’t have to pay for a HOA fee, which are tacked on fees that cover everything from building management, building upkeep, water bills, garbage fees, and so and so forth.

Advertisements

Not having to pay that HOA fee means saving yourself an extra 200 to 500 dollars a month!

Now buying a two family home is even more expensive than buying a single family house, you have all the same expenses as buying a single family and then some. The only difference is, when owning a multi family, you have the opportunity to rent the opposite side out, saving you on your mortgage payment.

I chose to go with a condo, because A. I didn’t have to put any work into it, if I did I would end up making the home worth more so that was a place. B. the mortgage was affordable as was the HOA fee, C. the price tag compared to other condominiums 30 minutes away was generally cheaper by hundreds of thousands of dollars!

Advertisements
Advertisements

Get a free sample of my Ebook on my social media, which will go into extreme detail on how to buy real estate. Or go to the link below and get the full book

A book that helped me in my journey was “rich dad poor dad” and it may help you! Link below

Advertisements

Top 3 Ways to Buy a Home with Bad Credit |No Money Down| Essential Real Estate Tips

There’s many hidden costs when it comes to buying real estate. You have inspection fees, attorney fees, appraisal fees, and so on and so forth. All of these fees, what you call closing costs, sum up to be anywhere from 3 to 6 percent of the total loan. And that depends on if you go with a FHA loan or a conventional loan. With an FHA loan you may pay more fees than what you would if you went with a conventional loan. This is all because you may be a little riskier credit wise, FHA loans have less strict lending restrictions so people with lower credit scores go with these loans making the closing costs more expensive.

Advertisements

But fear not there are a number of ways to work your way around paying these closing costs and even down payment. You just have to use your resources well, and search through the internet until you find a blog that will guide you through the way, like this one! Being a first time home buyer opens up a lot of doors when it comes to avoiding closing costs and high percentage down payments.

Advertisements

1 Find Grants that will give you up to 10k to fund your down payment and closing costs.

Let’s go into further detail on what grants are. Grants give you money that does not need to be paid in return. Money that comes with no strings attached is by far the single and best kind ,and it can help tremendously with your down payment. There are various grant programs out there designed to cater to your areas of need. Whether it’s money for a down payment or closing costs. You can receive grants from nonprofits, local governments, and even employers.

Advertisements

Examples of Grant Programs (click the programs for more information):

Freddie Mac Home Possible 

HomePath ready buyer program

NJHMFA state-wide Down Payment Assistance Program

Photo by PhotoMIX Ltd. on Pexels.com

2 Apply for a VA or USDA loan which will allows no money down

Advertisements

The U.S. Department of Agriculture also insures 0% down payment loans. The requirement is that you must buy a house in a rural area and meet certain income restrictions. Closely consider what’s important to you in a home and a location. When it comes to a VA loan, these mortgages are usually offered through a Department of Veterans Affairs program. They’re mostly available to active and veteran service members and their families, VA loans are backed by the federal government, but are issued through private lenders. VA loans have generous terms, such as no down payment, no mortgage insurance, no prepayment penalties and limited 

Advertisements

3 Ask for Seller Concessions, and let the seller pay for your closing costs 

When going with a FHA loan you can only receive up to 3 percent of sellers concessions. So if your house’s purchase price is $100k, you’re getting $3k from the seller. This should cover the closing costs in full if it doesn’t you can roll the rest of closing costs into the end of the loan. 

Photo by Andrea Piacquadio on Pexels.com

The next step would be paying the down payment, which would equal $3500. If you want to take it even further, you can borrow the $3500 from a family member. If you go with this method you would end up paying $0 to own a piece of land and a piece of property. 

Don’t let the Corona Virus stop you from investing in Real Estate! Use the Stimulus Bill to your advantage!

Advertisements
Photo by Pixabay on Pexels.com
Advertisements

Real estate is one of the most simplistic ways to earn money. With a relatively small monetary investment and some sweat equity, you can turn a substantial profit. The future outlook on real estate investing is positive and constantly evolving. For new investors, one of the most difficult hurdles to overcome is learning the ropes of the real estate business. Real estate transactions are complicated, and if you are not educated on the ins and outs of the business, you potentially could lose large amounts of money, fast. Before you get started in real estate investing, spend some time thinking about the best approach for your financial situation, personality, and risk tolerance. One in four residential homes is bought as investment property. Many real estate investors are regular people just like you who make impressive side incomes. Some people even earn enough to make real estate investing their primary income. 

Advertisements

This website will teach strategies you can use when investing in real consider – like real estate law, tax implications, and non-traditional real estate investment options. While being a real estate investor is, at times, stressful, it also can be mentally and financially rewarding. 

Advertisements

Your First Real Estate Investment 

Making your first real estate transaction, either as your primary residence or as a 

planned investment, can be profitable and exciting, but it can be overwhelming 

too. Follow these steps when starting out in real estate investing. 

1. Educate yourself. This doesn’t mean that you need to go back to school, but you do need to take responsibility for what you need to know, and learn it. Study the market you’re interested in entering. Use the internet, local land records, and area real estate agents to find the sales prices of comparable properties. Learn about the transaction process, each person’s role and responsibility, the legal requirements, and insurance. Each component carries fees that vary, and by researching prices you can avoid losing money. 

2. Get your financing in order.

A common mistake made by first time investors is to find the property first, then get financing. Before you go out to find that hidden gem, get pre-approved for financing. Decide on a lender by choosing a bank, mortgage company or online loan company. When talking with your lender, tell them how much you are looking to invest. They’ll gather lots of financial information about you – income, credit history, liabilities – and give you an idea of how much they’ll finance. With the many different financing choices available today, you’ll need to decide which option works best for you. Financing plans have different variables including different rates, initial cash investment, and tax implications. 

Advertisements

3. Look for your property.

Finding real estate that you can make a profit with can be tricky. Use the internet and local newspaper’s “Real Estate” section. Look for abandoned and “For Rent” homes. Drive around the area you’re interested in and try to find “For Sale by Owner” properties. 

4. Negotiate a fair deal.

Once you’ve found the perfect house, you’ll need to negotiate for the best price. Don’t expect that you’ll get a steal. Sellers are trying to the most money for their property, and buyers are trying to pay the least amount. Negotiating well involves working together with the seller to find a win-win situation. Be assertive, but plan to make concessions. Inflexibility often causes expensive delays and added stress. 

Is Real Estate Investing for You? 

Real estate is an intricate business that involves many different legal, financial, and interpersonal aspects. Are you ready to jump into this complicated business? Think about these essential questions before you make your first move. 

Advertisements
Photo by winrood lee on Pexels.com

1. How much money can you invest? 

Investing in the real estate market requires capital. The initial outlay of cash needed upfront to acquire a property may be large or small. Whether, it’s cash coming from your pockets, or cash that will be coming very soon, in the form of the stimulus bill, that millions of Americans will be receiving. You can use some of that money to put towards your down payment.But be sure you can afford to invest by looking closely at your personal financial situation. How much cash do you have? What amount of debt and how much interest can your finances handle? Think about how much you can lose. 

Advertisements

2. Are you risk tolerant? 

Risk and capital go hand-in-hand. How much risk are you comfortable taking on? A large loss to a small investor has a much larger impact than the same amount to a wealthy investor with deep pockets. While risk-taking can be exhilarating, be honest about your finances and think about the level of risk that will be comfortable to you. Do you naturally enjoy taking chances, or do you tend to be more risk adverse? It’s essential to success to know your comfort zone. 

Advertisements

3. What are your future financial plans? 

Are you interested in investing to maintain capital or to get the highest return in the shortest amount of time? Consider the amount of time, money, and risk associated with each scenario. Be logical. A straight 15% profit over a couple of weeks is not realistic. If you are interested in a high return, this usually means there’s a longer time commitment, which means your money will be tied up. The value of property can change quickly, leaving you in a higher risk situation. 

4. Do you have what it takes? 

To be successful in real estate investing, you need to be detail oriented, a quick learner, and have excellent interpersonal skills. You need to have the self-management skills required to determine what you need to know, then go out and learn it and apply it. 

Advertisements

5. How much time can you spend? 

Think carefully about how much time you can commit to the day-to-day tasks required to be successful in this business. In the beginning, you’ll need to spend a lot of time researching and learning about the business. With every endeavor you’ll need to spend time working on legal issues, zoning and town issues, insurance, tax concerns, contracts, market research, financing. If after considering these questions you are still interested in real estate investment – congratulations! This field is one of the most exhilarating ways to make a living. 

Advertisements

Thank you for so much for reading! Feel free to comment, like, and share to others to inform them of the vast benefits of Real Estate Investing.