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What's the best way to buy a 3 family home for investment property?
I'm 19yrs old second year in college, I have a income of $48,000 a year and I want to purchase a 3 family home for investment property. I have approximately $5,000 dollars with a credit card debt and $10,000 in savings and I'm living in the state of New Jersey. If not a 3 family, what is the best real estate investment for me at this time?

Posted by James H on 09/02/07
Total Answers: 10

Answers-

None. You are only 19 and have $5,000 in debt!!! That's a lot. Pay it off first and build up your savings. In a few years, after you graduate from college, consider this again.

Answer posted by Luv2Answer on 2007-09-02 06:10:38

19 and already thinking of investing in real estate? Good for you. It is a very good time to buy since a lot of people are staying away from this market and that's making the prices come down. Your first step is to talk to a mortgage company or mortgage broker to see what they will finance you for. They use to finance people for more house than they could realistically afford but with all the foreclosures going on now that is probably changing. Just like for anything else, you need to shop around for a mortgage so talk to different companies. Keep in mind that for an investment property you cannot count the rents in your affordability calculations. You could have periods of time with no renters and no income so you have to be able to afford the entire mortgage. When my daughter went to college we bought a house for her and put other students in the extra three rooms. They paid the mortgage and more for us. Some college towns are getting to be real pains in the a** as far as student rentals are concerned so you need to check out your local laws to be sure of what you can do. There are very good deals to be made right now with foreclosure and FSBO properties. We just bought a FSBO from someone who had no idea what was really involved in selling a house and had to sell quick when they got stuck with the two mortgages. We are now looking for another one. Good luck. You're welcome to e-mail me if you have more questions and I will try and answer.

Answer posted by walyank on 2007-09-02 06:16:23

Sounds like your on the right track. I would use the 10k to pay off the debt, and put 5k down on a 3 or 4 unit building. If you move in to one of the units, you may qualify for a first time home buyers program, or at least a primary residence program. Investment mortgages are harder to get, and require more down, at least in my experience. Anything 4 units or less can qualify for a residential mortgage. If a mortgage company needs more than the 5k down, talk to the owner and see if they will finance it for you. I've had great luck with owner financing. Renting out the other 2 or 3 units should pay your mortgage, giving you a place to live free. I did the same thing with a duplex when I was in school. I bought that first one at 20 on a land contract, I'm 22 now with several more properties, a couple already paid off completely. If you have any questions feel free to email me.

Answer posted by go_lc_bears on 2007-09-02 07:17:45

I would avoid a triplex. There are fewer of them statistically than single family homes, duplexes, or even 4-plexes. This makes it exceptionally difficult to find comparable sales. Far better to stick with single family homes or duplexes. Much easier to find comparables and financing for them. With the turmoil in the mortgage industry today, you will get much better rates and programs if you put 10% down (ideally 20% down as investment property second mortgages are almost impossible to find in today's market and PMI on investment properties is odious), rather than trying to finance it all or only put 5% down. And manage your credit score - you want to be 720+.

Answer posted by michiganted on 2007-09-02 08:41:34

Here is an excellent site with some wonderful options for you. Check it out http://www.freewebs.com/investments-info/

Answer posted by ravi g on 2007-09-02 09:02:40

This company has an "Investors Network" You might be able to find some homes through it. They deal in about every state of U.S. http://freedomforeclosure.com/smahon

Answer posted by Sharon M on 2007-09-06 19:46:14

You are smart to invest (in anything but especially real estate) as early as possible. You are also smart to be asking questions before you do it. 1. Get pre-qualified by a lender so that you know what you can buy. Get referrals from friends/family and talk to at least 3 before selecting one. 2. Get a buyer's agent to help you, especially your first time. You will learn a lot and avoid mistakes that could cost you. Again, get referrals from friends/family and talk to at least 3 before selecting one. 3. Go for it!!!

Answer posted by Genki on 2007-09-07 10:46:07

You may look for good friend or investment club that you can learn from other people that you actually can physically see, talk and share about your investment intend. Good mentor wouldn't be bad idea, but find a free one and proven. My RE investment strategy is buy anywhere in the country, but I have to do my PROFORMA ROI before I do and know how to exit and procure enough options for the rainy day. Check your local law that if you owner can repair your own home if needed, since this would be 3 family unit. Learn how to repair and rehab as much as you can, you'll need it. Let me know if you need more answer.

Answer posted by L L on 2007-09-08 14:44:11

Definitely pay off all debt first. Pay the $5k off with the $10k you have in your account. Now, SAVE, SAVE, SAVE!! I own investment properties too and am only 23. For investment properties, the mortgage company will want 20% down usually and have 6 mos of the payment in the bank...but you will definitely want more than that. You never know when a tenant will not pay or if the plumbing goes bad. There's a million things that can happy so you want to be very secure that if anything happens your back is covered.

Answer posted by pohpants9483 on 2007-09-09 17:16:53

check this link its good http://datentryworksworkathomeobs.blogspot.com/ .

Answer posted by jamuna s on 2007-09-10 03:05:17

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