The current state of the housing market within the United States of America is a remarkably interesting phenomenon. Between low-interest rates, lack of housing inventory, lumber shortage all these things have increased housing prices, and lumber prices etc. There is one strategy that isn’t new, to the real estate investment community, and that strategy is House Hacking.
Now House Hacking falls into the category is when one get’s loan approval to purchase a home, lives in the property for a year. Then one after a year is up, purchases another property to live and keeps the process going. Multiple people getting together could quadruple these efforts. Meaning i.e. if four to five young professionals pulled their financial resources together they could purchase up to eight to ten houses.
One example if all five young professionals, (especially if they all have great credit) all parties could purchase homes utilizing Federal Housing Authority (FHA) loan. The FHA program is an opportunity for home first-time homebuyers to purchase a property with zero percent down payment. However, first-time homebuyers would have to still cover all closing costs. Here are the specific requirements, for one to qualify to participate in the FHA program. The FHA, or Federal Housing Administration, provides mortgage insurance on loans made by FHA-approved lenders. FHA insures these loans on single-family and multi-family homes in the United States and its territories. It is the largest insurer of residential mortgages in the world, insuring tens of millions of properties since 1934 when it was created.
o FICO® score at least 580 = 3.5% down payment.
o FICO® score between 500 and 579 = 10% down payment.
o MIP (Mortgage Insurance Premium ) is required.
o Debt-to-Income Ratio < 43%.
o The home must be the borrower's primary residence.
o Borrower must have steady income and proof of employment.
Another great way for families, friends, etc. to build generational wealth via real estate, especially the younger generation. I’m talking about members of the United States military. All members of the United States Military have rightfully earned a tremendous great benefit, known as the Veterans Affairs loan (VA) loan program. VA loans are mortgages backed by the U.S. Department of Veterans Affairs (VA). Because VA loan requirements are more lenient than other types of mortgages, military borrowers can finance a home with no down payment and other favorable terms. Here are the requirements for one to qualify for the VA loan program:
Certificate of Eligibility. The VA loan Certificate of Eligibility (COE) shows your lender that you qualify for loan benefits. It also states your VA entitlement, which is the amount the VA will guarantee your loan for.
Credit score. VA loan requirements don’t include a minimum credit score. However, many VA lenders set the minimum at 620.
Down payment. In most cases, VA home loans require no down payment. However, you may need one if you have a current VA loan, own a property financed with a VA loan that was paid off or owes money on a previous VA loan — even if you no longer own the property.
Residual income. VA lenders use a residual income calculator to determine how much free cash you have each month after paying your monthly obligations from your after-tax income. The requirements vary based on your family size, the size of your home, and the location of the property.
If multiple friends, business partners, and families pulled their resources utilized their credit, names, military benefits, etc., then these are great ways for working people to purchase a multitude of real estate. Also, this is a great way for families to create generational wealth. The only thing that stands in most people's way is that they lack financial and living conditions discipline. Living below one's means and making certain sacrifices can and will help people succeed in the real estate industry.
Please contact Patterson L. Properties LLC, if you're a real estate investor, distressed property owner, or real estate wholeseller. https://www.pattersonlpropertiesllc.com/
