How to Start Investing in Real Estate With Only $20,000

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If it were easy, then everyone would be doing it.

In my opinion, nothing comes without hard work and sacrifice. So, if you want to make money in real estate, you better be willing to work hard and sacrifice pretty much everything. I did exactly that. I moved from Australia to Kansas City, of all the places. I only had $15,000 in cash and bought a D-class property for $9,000. I renovated it for $4,000, so I was into the deal for a total of $13,000. Then I turned around and sold that property for $27,000. That was one of the first deals that I ever did in the U.S. real estate market.

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Where Can I Find Affordable Deals?

Now, you’re probably thinking, “That’s great, but how do I do that in my area because there are only $500,000 properties?” Again, nothing comes without hard work and sacrifice. So what you need to do is pack up and move to a market where the numbers make sense. I’m sorry, but there is no other way to put it. I know a lot of you are living in very expensive markets where the average house price is $200,000 and up. I just don’t know how you can make money in those markets. I don’t believe in using a ton of leverage, and I don’t believe in doing creative development-type deals where you need to do a full-blown structural rehab to a property, involving a lot of people. That is too many people in the mix, and people equal problems. You want to control your destiny and be the master of your fate.

If you have $20,000, you should find distressed assets. Get really good at negotiating and develop patience. Having patience is the key to finding the right deal. Never pay more than you need to because when one door closes another one opens. So be patient. Find a distressed asset, preferably in the Midwest because there are a lot of cheap properties there. You’re probably not going to be able to get an A or B-class property; you’re probably going to have to go into a C or D-class property, but that is not the end of the world. You need to learn somewhere, and the lower the amount of money you invest, the lower your risk is.

Now, let me backtrack here a bit before I go into any more detail. The most important thing when you are looking to invest in real estate is not the numbers in the deal. It’s not the stats and demographics of a particular area; it is the people. Again, the people you surround yourself with are the more important thing in real estate. You have to build trust and relationships with key people who are going to help get you to where you need to be. You need to have contractors, a good real estate agent, a good attorney, and a good accountant. You need to have a respectable title company that you can rely on to make sure the deed is correct and there are no liens. So, it is very important that you surround yourself with the right people who can help you on your real estate journey. Let’s fast forward now.

Distressed Real Estate

So, the Midwest has some great opportunities, a lot of foreclosures, and it makes me feel like a kid in the candy store because deals are falling off trees. Buy a distressed property, negotiate well, be patient, and find the right deal. Fix it as best you can. I know you just started and you don’t know much, but be hands-on and work on the property yourself. Be next to a contractor while they are working on the property. Spend two, three, four weeks. I don’t care if you have to sleep at the property—just do it. Hard work and sacrifice—never forget that.

Related: Should I Buy Several Cheap or a Few Pricier Houses? An Investor’s Analysis

Once you renovate the property, look at selling it. Try marketing it on Craigslist, try getting a real estate agent to list it on the MLS, parade the property on Facebook, and network with both local and non-local real estate investors who may want to buy and hold. Sell the property for a profit and then rinse and repeat. Just keep doing that over and over and over. Fast forward to today, and I’ve done 500-plus real estate deals. I’m doing exactly what I’m telling you guys, just not in C and D-class areas anymore. I’m still working with investors, and it has served me very well. Buying distressed properties, renovating, and selling for profit has been my bread and butter in real estate ever since I started. There are many other ways to make money in real estate, so please don’t take what I’m saying with a grain of salt. But, if you only have $20,000, buying a D-class property that is dirt cheap, renovating it as best you can, figuring out how to sell it, and making it a win-win for you and the person you’re selling it to is a great way to start. Then you’re off to the races.

Anyone else with $20,000 strategies? I want to hear them.

Please comment below.

About Author

Engelo Rumora

Engelo Rumora, a.k.a.”the Real Estate Dingo,” quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate all over the world and has bought, renovated, and sold over 500 properties. He runs runs Ohio Cashflow, a turnkey real estate investment company in the country (Inc 5000 2017 & 2018) and is currently in the process of launching a real estate brokerage called List’n Sell Realty. He is also known for giving houses away to people in need and his crazy videos on YouTube. His mission in life is to be remembered as someone that gave it his all and gave it all away.


  1. John C.

    Hard work and sacrifice. Couldn’t agree more. There is no easy way to achieve anything worthwhile.

    My wife and I have actually slept at our C properties on occasion. You don’t want unwanted people moving in before your tenants;)

  2. Rob Cook


    Usually, you and I can find lots to butt heads on;). But in your post today, I have to say I agree with you 100%.

    I spent a couple days coaching a client including driving for dollars, in the Salt Lake, Utah area this week. The market is so hot, that finding deal is beyond difficult. Not impossible, but very hard, due to competition.

    Several of the 13 distressed properties we identified in 5 hours of driving, was already bought by the same wholesaler, a pretty established one in the area, who told me he buys 300 per year. Online marketing funnels, ads, the whole system in place and 10 years tenure in that market.

    Other prospect properties had been purchased by smaller entrepreneurs, usually, locals living in that neighborhood. This will always be the case. And to your credit, anyone can MOVE to an area where the market is more beneficial and literally live there and become such a “local” entrepreneur and dominate their neighborhood as the go-to guy if you want to sell your home fast, without fixing it up, etc.

    The ONLY good thing about that hyper-competitive Salt Lake area environment, was that IF you actually find a deal, you will have no trouble selling it well.

    So it just screams out – screw trying to work in this market. Better ways to spend your time, unless you are stuck there, geographically, which my client is. So he just has to deal with the reality that it is going to be a lot harder for him, than it is, apparently, in your market, or in mine, in Wyoming. He has enjoyed high rates of appreciation, in that market, so one cannot have it both ways. That means finding deeply discounted deals will also be much harder. The “secret” is out already.

    • Engelo Rumora

      Thanks Rob,

      The “Hotter” markets tend to appreciate much more than the markets I’ve been use to working in.

      I don’t like waiting for growth to happen and would rather manufacture the growth through rehabs.

      Plus, I don’t have 10 years to wait.

      Australia has been calling out to me for a while now.

      I will need to go back home eventually hehe

      Thanks again for your comment

  3. Dave Rav

    Ok Engelo. I appreciate many of the points you make. I agree with some of content in this post. The hard work part – definitely.

    However, for folks living in high-value markets I think you’re off here. You mention they need to pack up and move to another local. No sir, I disagree. They may be faced with a dilemma in cost point here, but they have other options than only moving to another region.

    1). Structure an owner-fi deal. This may be tougher in competitive markets, but it CAN be done. Less of a chance doesn’t equal zero chance.

    2). Extend your radius. Ok so you’re in SLT. Whatever. Go 50-60 miles out. Likely cheaper properties out there. That can be your “hard work “ part, if you will. So you have to “commute” to the deal and it’s a little less convenient. Still beats moving.

    3). Installment purchase. Ok, so we’re in a high value market. When these sellers sell, the tax implications (and agent commissions) are that much more expensive. Maybe the seller with lots of equity would entertain taking payments over time, in order to avoid tens of thousands in commissions and taxes.

    I despise moving. By moving your home base, you’re letting your business control you in a major way. That’s not how I like to operate. That doesn’t mean you don’t sacrifice, but merely you should be able to CHOOSE the degree of sacrifice. It doesn’t need to be this extreme, buddy.

    Thank you for appreciating my perspective.

    • Engelo Rumora

      Thanks for your comment Dave,

      Personally, I have no issues with business controlling me for now while I’m young and still heavily in “business mode”

      My home is Australia and I’m making a sacrifice just by living in the US lol

      Today it’s Ohio and tomorrow it’s Illinois.

      I follow my gut and wherever the opportunity is, I will follow that path.

      I don’t think the 3 strategies you mention above make sense in my opinion just because I know the deal flow that is on offer in other markets.

      Each to their own off course

      Much success

  4. Yes you are right nothing comes without hard work and sacrifice. One can start with small amount initially then when they get settled can increase their investment slowly and grow big. I think $20000 is sufficient for initial investment. Yes count of people is very important rather than number of deals. Also thanks for giving these many suggestions and tips to us through this article engelo.

  5. Patrick gilsenan


    Thanks for the post and I certainly encourage creative ways for people to get in the business. I sometimes worry, however, about the difference between the advice in blogs and how that advice plays out in reality.

    Properties that have been neglected for decades and can be had for $20,000 often need full electrical, plumbing, sewer line, roof and appliance replacement/upgrades. And that is only if you don’t discover mold that needs to be remediated, structural issues caused by years of undetected leaks, unsafe handyman fixes the need to be reinforced or redone. These can all quickly bankrupt and ruin the credit for years of individuals with limited funds who don’t have the reserves to hedge against the many unknowns of distressed properties. (Particularly on first-time properties)

    Can you please go into more detail about what you think the exact repairs of such a property would be? Are you advocating leaving the past-their-lifecycle systems as is for the next buyer to deal with and just painting it? Essentially doing slightly more advanced resale staging and then reselling it a slightly higher price still as a dilapidated property to the next investor to do all of the upgrades that would be appropriate for a buyer seeking home? Or are you advocating buying the property for $20,000 but getting a large hard money loan to bring all the systems up to the standard for a family buy without them experiencing problems soon after taking possession? You had mentioned that you want to steer clear of structural rehab, so could you please give a better idea of what you think is appropriate list of repairs for distressed property on a limited budget for resale and to whom are you reselling?


    • Engelo Rumora

      Thanks Patrick,

      Believe it or not, the Midwest offers some amazing deals that haven’t been neglected for decades.

      Also, the Midwest offers some pretty cheap labour (For example: New furnace $1,300, Electrical up grade $1,500 – $2,000, New HWH $700, etc…)

      So with the above said, a property can be thoroughly renovated and won’t “bust the bank”.

      Buy cheap, use cash, renovate frugally and sell.

      Rinse and repeat.

      Thanks again and much success

      • Patrick gilsenan

        Thanks! It can be difficult to adjust one’s numbers living in Washington DC – an efficiency apartment in a good neighbourhood is $200,000 plus with repairs correspondingly high.

        Speaking of the Midwest, all of the urbanism writing I can find speaks to increases in urban areas while more rural suburban areas will essentially dive their own financially inefficient weight. Are there any Midwest cities you would recommend for buy and hold strategies?

        • Engelo Rumora

          I would look at Ohio. Michigan and Indiana

          Look at the micro market and not macro

          Take a deeper dive into an area and meet locals

          Online research is fluffy

          Just my opinion


  6. Donald Sawyer

    I live in NYC. I like the south and have lived in Atlanta, GA. Do you think Jacksonville, Houston, Charlotte, Atlanta are good areas for what you described? If not then what cities that would logistically make sense? Milwaulkee, Kansas City, St. Louis, ect????

  7. Awesome Article Engelo!! I live in Dallas, Tx and the market is hot as fish grease. Do you thing i should invest outside of Dallas Area or even out of state such as Oklahoma???

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