How Much Money Do You Need To Invest In Real Estate?

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Real Estate Agent with Heisler and Mattson 9556777

If you are looking to invest in residential multifamily (2-4 units) There are duplexes and triplexes everywhere in Worcester County! With a huge supply, it is possible to get a property under contract for a great price.

Before you begin looking for your next deal, it is essential to speak with your lender to see what you are pre qualified for. Your lender will look at your debt, income, and assets. They will give you an idea of the mortgage amount you qualify for. This can be done over the phone or online. Once you have this number, only look at properties in this price range.

First determine your goal with your investment

1. Buy and Hold

The property will be purchased strictly as an investment. Typically this is 20% down. One benefit is with a conventional loan, you are not paying the additional private mortgage insurance. This can save you hundreds a month! In a buy and hold, you can chose to manage the property yourself or have a property manager. It is always smart to include property management in your numbers. The goal for a buy and hold is to sell in the future for a profit.

Example:
Property listed: 300k
Down Payment (20%): 60k 
Estimated Closing Costs: 6k 
Initial Repairs Needed: 2k 
Total Investment: 68k

2. House Hack

The property will be purchased as a primary residence. In a duplex or triplex, you will be living in one of the units. With an FHA loan, you can buy at 3.5% down! With a very low down payment comes the monthly PMI added to your costs. Since you are living in the property, you can manage or have property management. The goal for a house hack can be a mortgage helper, or the first purchase in your portfolio.

Example:
Property listed: 300k
Down Payment: (3.5%): 11k
Estimated Closing Costs: 6k
Initial Repairs Needed: 2k 
Total Investment: 19k

These are two ways to get started with real estate investing. House hacking can be a great starting point to see if landlording and managing tenants is something you enjoy. Keep in mind, it may take looking at numerous deals before putting an offer on one.

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Steve Bracero is a Real Estate Agent in Worcester County, Massachusetts and Real Estate Investor. Blog Topics include: Investing in Real Estate, Helpful Tips on House Hunting and Selling Homes. Areas of service include: Ashland, Blackstone, Douglas, Franklin, Grafton, Hopkinton, Hopedale, Medway, Milford, Millbury, Northboro, Northbridge, Shrewsbury, Southboro, Sutton, Westboro, Whitinsville, Worcester, Upton and Uxbridge.

 

   
Steve Bracero
Real Estate Agent, Heisler & Mattson
774-232-2526 | steve.bracero@heislerandmattson.com | www.stevebracerorealestate.com | 182 Turnpike Rd #209, Westborough, MA 01581

 



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Kathy Streib
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Home Stager - Palm Beach County,FL -561-914-6224

Hi Steve- I'll bet there are some first time investors who will welcome this information on what they need to save to make this kind of investment. 

Jul 30, 2017 04:53 PM #1
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