New investor in PA looking for some insight, financing questions...

Im 19 and im working to buy my first investment property. I have a nice ammount of cash saved up, but not enough to be buying any properties outright in cash. This is where my problem arises. I cant seem to get financing, i only have around 6 months of credit history, and the only job i pay taxes on is only around 20k a year.

I was discussing this issue with my realestate mentors and they told me some ways to go about it, first: keep saving money untill i have enough cash to buy my first property outright. Risk wise this seems like the safest way to start, but by the time i have that kind of cash property values might allready be on the rise

another option would be owner financing, although it always seems kind of shady and im still not completly sold on this idea. A close friend of mine owns a title company and she told me the process is very simple and its nothing to worry about.

The last option i see would be to partner up with another investor on my first property. Try to do a quick flip, which in itself is risky in this market. do a few flips and hopfully have enough to buy outright.

what advice would you give as far as getting started?

If you save up enough for a down payment required by a bank, would your parents co-sign on a mortgage for you if it was all your money in the deal? That might be a way to get a property faster than saving up to pay all cash.
I have not personally done a deal w/ owner financing yet although I’d be willing to do it if all the paperwork was straight and the deal was right. Sometimes owners may have a good reason to offer financing. They may be trying to market to people w/ decent income but blemished credit and could not otherwise obtain conventional financing. They might also want to take the income on the sale in installments over time rather than all at once for tax purposes.

What part of PA are you in.

 Are you trying to find a property to rehab? You may be able to use your money to purchase the property and find a hard money loan to assit in the rehab.

Im mainly looking for a place that is good to rent out. I really want a 2 unit property. I cant get my mom or dad to cosign, my dad is not very good with his money, and my mom has none, so there is really no help in that department. One of my mentors however suggested that she would possible cosign for a property, but she is also the one telling me to save and buy with cash. All my friends my age or a few years older, were able to get stated income loans for their investment propertys.

im in bethlehem for whoever asked

One beauty of REI is being able to leverage money and buy properties for a percentage of the purchase price. Yes you could save up and buy all cash, but you would accumulate properties very slowly.
A duplex could be a nice place for you to start out. Can you do any repair/rehab work on your own or w/ the help of friends? Buying right and being able to do some things on your own will help out. I’ll let the finance guys on here to give you the current perspective regarding stated loans.
I think you’ve got some good goals. Keep this at the forefront of your mind. Being dedicated to buying a property should help you live within your means. You’ll realize buying something to invest in your future means more than buying that daily Starbuck’s Coffee, new big screen tv, etc.
Pick up what you can here about buying right and get yourself prepared for landlording. Get all your forms made up so you’ll be ready to go. Go to the library and check out a couple books on landlording. There’s lots of good info here, but you’ll also get some good ideas from some books too.

Yep i can do most repair work on my own. I can do a little bit of everything, ive painted multiple buildings, framed a little bit, minor electrical experience, plumbing etc.

I hate not doing anything right now, I feel very unproductive. thats why im really not into the whole saving to buy a place in cash idea. How much longer are you guys predicting the market will stay this low, everyone i know is saying another 6 months at least.

I don’t think you’ll find anyone saying it will come back in less than six months. I’ve heard reports that mention 2-3 yrs from now. A lot depends on where you are. If you’re not in an area that had a huge run-up, prices may just be holding steady with some people that can still make their payments and not HAVE to sell. As you read posts on here, you’ll see some people think things will get much worse before they get better. A lot will also depend on decisions made by the new administration.

Real estate loans are much easier to get if you buy for a residence, “owner-occupy” the property. If you buy a duplex, can you find a beginning investor like you in a real estate club or class? Then you can both buy it, pool your cash, move in, fix it, and plan to re-sell or rent it out in a couple of years.

Go talk to a mortgage broker or banker and get his/her advice. Also check out first-time home buyer programs in your area.

Good luck! My 19-year-old office assistant and her fiancee just bought their first house for $30,000. I have also sold houses to 19-year-olds back in California. Most of them were in the military and the lenders liked the job security and made the loans. I wonder how many of them ended up as millionaires because they started so young.