I am a 20 year old student who is saving money to make a flip in the near future. I currently have $300 saved and will continue to add $50-$100 each month I get paid.
How much should one save to make a down payment on a house? $5,000, $10,000, $20,000? and how much of a mortgage should I take out?
I am new to the real estate world so ANY input/suggestions are welcomed!
Thanks,
Rob
It depends on what you are planning on doing, what the property you are looking at costs, there is no set amount you should save up.
I think you definitely should read TONS more and perhaps buy a cheap real estate investing course on ebay before you even start saving money.
How much of a mortgage should you take out…?
…that depends on how much the house costs…
Please look at the awesome free articles on this site, and the thousands of great posts on this site and other sites.
One thing you want to do is decide what you want to try. When you say flip does that mean buy fix and sell or do you just want to find the deal a flip it to a rehabber. Starting out you may want to try and wholesale a couple deals. A lot less risk.
What does wholesaling entail?
Sign a contract with a seller (must be a GOOD deal), then assign the contract to another investor for a fee ($5K, $10K, or whatever). The assignee basically assumes your position in the deal and closes with the seller, while you move on to other deals and never have to be on title.
Go here to listen:
http://www.reiclub.com/authors/jonescox/022707download.php
Ben
I’ve got a home work assignment for you. You’re in college, you’re used to doing homework.
Take the figure that you are paying for rent right now and go to an amortization site and figure out how much mortgage that monthly payment would pay for.
Next, take that mortgage figure and take a look at the real estate around your college and see if you can buy a small place for that amount. If so, you start to apply for first time buyer mortgages and you buy the place you are going to be living in while you attend school. Your living costs will go up a little bit because you will then have repairs, insurance, and taxes, but paying a mortgage is like putting money into the bank.
Living with a rommate is really miserable, but you are young and can tough it out for a couple of years. Once you own a small house, you get a roommate and he will give you rent that pays half your mortgage for you.
When you graduate, you can keep the house for a rental if you are going to be close by, or you sell it and take your money out to invest in something else. If you know you will be selling it, fix it up really cute while you are living in it so that it will sell at the top of the market.