22 Years Old: First Apartment Building Acquisition Done

[Envision]

How do you get approved on a 200K+ mortgage at 22?

I got approved for 185k when I was 20 making 30k/year with a 720 credit score - FHA allows lower income people to purchase a residential property when they have lower means. There is more red tape, you have extra insurance to pay because its a government backed loan but it gets your foot in the door with real estate!

I thought you weren't allowed to use FHA financing to purchase investment properties.

If i can get an investment property with 3.5% down then I've been doing something wrong.

Edit: nm I didn't read the OP well enough to notice he said he was occupying one of the units

FHA is owner occupied but residential includes 2-4 units. So you buy the property, live in it for a year, repeat, and rent out the property.

Credit history, assets, income. If you have a 795 credit score, paid off school loans, s new-ish car, and a $100,000/yr salary, they won't even blink to approve you for $200,000. You could probably get one for $500,000 or $600,000 with stats like that.

This. With a six figure income, low/no debt and good credit you can really create some great opportunities for yourself.

 

[Guest34764]

Bumping this awesome thread, thank you @G_Alexander for this.

 

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[JasonR]

Wow, great post! I know very little about investing in Real Estate, but I'd really like to dive into this subject when I get more time. Great job, you're very young.

Just curious, why are you only working your high paying job for 2 years? What plans do you have after the job?

 

[VanToai]

G - congrats on your continued success, and thank you for sharing. Yours is definitely an inspiring story, and the details that paint the process behind the events are fascinating.

I honestly think deals related to mobile home assets are hidden gold.

My main focus is software/mobile, but I love learning about the real estate market (perhaps for future reference). This statement in particular piqued my curiosity. Were there any resources/reading out there that helped you formulate this opinion? Mind sharing?

 

[awesom-o]

Amazing achievement G!
I read through your mobile home thread a year or so ago and was majorly impressed/inspired with the action you had taken
It's great to see your natural progression into multi family complexes.
I had one quick questions if you wouldn't mind pointing me in the right direction. I've seen the Scuggs book recommended on a couple of RE threads... is the book USA market specific or would it be suitable outside the US?

To your continued success

 

[DeletedUser397]

This is really awesome. I'm really inspired by how you took action at such a young age and are making things happen. Good for you.

 

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[G_Alexander]

Thanks again for all the kind words!

BOOM. Congratulations. Is this in Iowa City or Chicago?

Milkanic,

This property is located in Chicago.

 

[Dsal]

Congrats man..im 23 and looking to do the same thing..this is definitely motivation...how did you learn the in's and out's of real estate though? im looking at the numbers your posting like damn i have a lot to learn..but where to start.

 

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[Twiki]

After this thread and after following your earlier thread about the mobile home deals, you are my hero. A couple of Lonnie Scruggs books "Taking the Mystery out of Money" and "Deals on Wheels" are two of the best books I ever read and helped get a sense of how Lonnie (and people like you) think(s). Very entertaining reads too... I could hear Mr. Scruggs' voice sharing his experiences, and teaching me how to use an HP financial calculator, while having a beer sitting on a lawn chair. Unfortunately I got scared off from doing MH deals because of all the news that was going around about the SAFE Act but that sure didn't seem to stop you!

 

[prime]

Speed+ Haven't read your story for mobile, but read this and your definitely making moves!

 

[CEBenz]

Wow! Just saw this thread. Good job!
How did the mobile deals turn out?

 

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[Brentnal]

I read most of your threads today and F*CKING WOW, you are one real action taker it is amazing reading all the things you are doing/did on such a young age.
Rep ++

 

[21elnegocio]

Hey guys! Saw a couple notifications that this thread had gotten bumped. I wish you all a wonderful 2017 of hustling hard. Go out and GET IT!

I'm on a flight to China while writing this (on United Airlines wifi). This property appraised at $450,000 in September 2016 and I only owe $186,000. I took out a $100,000 HELOC on it which I'm investing into more brick and mortar business deals. Have tons of updates on my two businesses (eCommerce biz has grown 4x this past year, now hiring another employee... and my brick and mortar biz is opening our second and third locations this year). Lots to be thankful for and to look forward to in 2017.

Much love!

No wonder you didnt reply to my text message lol, looking forward an update on your business ventures !

 

[ravenspear]

If i'm doing between 60-100K reported income and have 40K student loan debt, what do you guess I could get approved for?

The 25K reflected an entry level salary + commission for half the year (was in school the other half) which will nearly double shortly (couple things actively in the works)

My credit is 750

To be approved for a conventional Fannie/Freddie loan your back end ratio needs to be less than 45%.

Meaning all of your monthly debt payments including your mortgage payment cannot exceed 45% of your gross income. So take your gross monthly income, if we say 75k/yr that would be 6250/mo. Then multiply by 0.45, we get 2812. Subtract all of your existing monthly debt payments from this amount. The remaining number is the maximum housing payment you can expect to be approved for (consider mortgage + taxes + insurance in this number). Then you can use standard mortgage calculators to determine what purchase price you can be approved for based on interest rate, down payment amount, and that monthly payment.

 

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[angelique]

Congratulations! Speed ++ for action taken.

 

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[JAJT]

Bravo.

:eusa_clap:

 

[Steve37]

Congrats. Nice purchase. At $211k even after your renovation costs you're looking at a 50% cash on cash return. Even though it's only got a cash flow of $750 by the time you add in interest / property tax deductions, depreciation, and income based appreciation you've got a great deal.

Wish I was smart enough to have been buying multifamily when I was your age.

 

[CTamme]

If you are going to manage it yourself you can easily decrease the expenses to 40%. That is great cashflow for 3%. Nice hustle and great execution.

 

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[Rickson9]

This is a fantastic story! Do you mind me asking how you found this property? Are you working with an agent?

 

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[GuestUser8117]

fkn great! That's what I'm talking about. My only concern for investing appartment is the tenants, from what I heard they can be a pain in the a$$, I'd rather invest in multifamily homes.

 

[Jamillah]

Congratulations, you definitely took action. We need more young people who have the ambition and will to get things done!

 

[danoodle]

Damn boyyyy! Mad props to you! I have been buying houses with only cashflow in mind, but 80k instant equity is sick! May have to consider buying properties for the goal of appreciation to diversify my strategy. Thanks for posting this and will definitely be looking forward to hearing about your next acquisition.

Also, I am curious about the financing. You said you saved up quite a bit with the lonnie deals and whatnot, is that money what you used for additional collateral or was the bank willing to just straight up finance it since it is technically owner occupied? I am assuming you have a good credit score.

 

[oddball]

Speed+
I am currently looking for a 2-4 unit as well. With my app business, I really haven't had time but I deal with this stuff work work so I can still keep my eye out for properties. Hoping to pick something up within 6 months.

 

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[Chitown]

G,

Congratulations!!!!!!!!!!!!!!!! Speed+

 

[Steele Concept]

Very impressive. I know nothing of real estate, but do know you grabbed that bull by the horns and went at it! Did you go to college? How could you afford such a thing with student loans?

I'm very interested in this.

 

[G-man422]

Way to go G! Speed++

 

[Milkanic]

BOOM. Congratulations. Is this in Iowa City or Chicago?

 

[stlsmoore]

Very cool, I def. haven't crossed doing Lonnie Deals off my list if I decided to go the physical property route, starting with MH's make so much sense.

 

[clarkster009]

Do you guys have a coach or mentor? If so, where did you find him or her?

 

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[21elnegocio]

Awesome man. I'm 20 and trying to build the capital to do this while I'm still young like yourself.

Same here man trying to build capital, on the other hand great effin work Alexander man your my hero bro one day I will be like you haha, anyways what else do you suggest to read to learn the real estate market? Im 21 and I was thinking of going to school for the Real Estate Prelicense what do you think of that ? Good or no ? So I can work buying and selling houses or is it just a waste of money going to school for that ?

 

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