1st time home buyer. Have some Qs

First and foremost, I’m a 1st time home buyer, and I don’t have some cash saved up right now…
So I’m currently thinking of getting a house and get it rented (my future goal)… I know wholesaling is great for beginners, but is it a good idea to be a landlord?

Some info about me:
I’m a college student in Socal, with some income for I work part time. I will transfer to a university in about a year…
If i do get a house, I could use that house as my dorm, and have the other room rented for other students… Should I?

I think buying a house while you are in college and renting out the other rooms is a good idea. The only thing to bear in mind is that you have to screen your roommates pretty hard. He has to be able to pay the rent but also needs to be compatible with you. You don’t want a guy that can’t sleep without the radio on if you need quiet or never studies and watches tv loud when you have finals to study for. You don’t want a guy that hits on your girlfriend every time she comes by or dates a girl you can’t resist hitting on. Also if you rent to a friend of yours that is a great way to turn your best friend into a person you hope you never see again.
In other words you turn a purely financial evaluation into a lifestyle question also.

Great points! When I created this thread, I completely overlooked the points you stated…
A duplex might solve this, and instead of a college student, it could be a small family/couple with steady cash flow.
I will definitely keep in mind your closing sentence.

It’s a good idea that you buy a house and let the other rooms to be rented… You’re living in your own house and at the same time your earning money… :beer

Out of curiousity, how are you going to do this with no money?

JP

Through creative financing?? I could probably do seller financing or some other no down to little down financing…
I’m going to a REI club meeting in a about 6 hours, and I really hope to learn a lot from them…
If there’s no other way, I’ll just work my butt off and do wholesaling for now…

From experience you should do that. EIther do a rent to own or find a really moviated sellers and work out a deal where u can live in one unit and rent the other. I did that when first starting along with wholeslaing and was able to build over 100K in cash in less than 3 months!

My BIL did this through college. He bought a nice 3br house and added another 2br and one bath in the unfinished basement. He rented each of the four rooms out seperately to four people on individual leases. He made a few hundred bucks a month all through college and never paid rent or the mortgage. My in laws loaned him the money for the down payment and cosigned on the home. That’s probably the only way to make this work.

I would look for an opportunity to creatively add rooms like he did and bring value to the place. This should let you buy it right and have good cashflow. In my area you are only allowed to have three tenants in a single family house, so people can buy a 4br house and rent to three tenants and cover the full rent on the place while living free. Make sure it’s on a 15 year loan - not a 30!! Then when you get out you should have about 20% paid off and have good equity to sell, rather than the 5% you’ll have paid off on the 30 year loan. That’s not enough to sell the place if prices haven’t appreciated. This is important with a short investment horizon like you have. If the cashflow numbers don’t work don’t buy it.

Hi,
This would be a wonderful idea to save the cash and pay the bills by generating money from the same time. For a safe side, you have to go through all the laws and legal issues related to rental property, otherwise you will be confuse about paying taxes and other things.

So how did the REIA meeting go?

I agree with the points above, just that with Seller Financing you may need to qualify.

Everything is depending on your immediate financial situation and long-term outlook, it can make more sense to rent rather than sell. In some cases, a short sale is the best remedy for escaping an underwater property and moving on with your life. Before you make any decision about renting or selling, be sure to consult a lawyer or accountant for customized consultation so that you fully understand the tax ramifications and benefits given your unique situation.
Becoming a landlord also offers some handsome tax perks. While rental income is taxed as ordinary income, your tax bill could easily be eliminated thanks to the numerous deductions on expenses and depreciation.

Buying a house while in college and renting out part of it is a wonderful idea. College towns are prime rental areas and everybody rents. Depending on how good the property is and how close it is to campus, you might even have a waiting list trying to get into the home. Make sure it is close to campus and in pretty good shape. If you are good at fixing things, that’s even better because there will be no maintenance costs.

Its good to be a landlord but very tiring sometimes because of the complaints that you get from tenants and for overdue rent payments…

Buying it and renting out the other rooms is also a good idea. But, it all depends on your financial situation. In recent years, the rate of homes bought for cash has grown. Clients who are able to afford it enjoy not having to go through the hassle and expense of finding a loan. Furthermore, home sellers will often lower the cost of a home to have the safety and quick closure that comes with cash sales. Alternatively, young adults purchasing for the first time have found their offers overlooked for cash on the table.

Good idea.Do your research for right location-where there is demand for rental units and with good returns.