{"id":119951,"date":"2019-12-08T12:00:58","date_gmt":"2019-12-08T19:00:58","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=119951"},"modified":"2023-03-20T10:19:00","modified_gmt":"2023-03-20T16:19:00","slug":"invest-50000-real-estate","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/invest-50000-real-estate","title":{"rendered":"The Best Way to Start Investing in Real Estate With $50,000"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC5814556222&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n<p>Today we\u2019re talking about how to invest $50,000. Let\u2019s get it started.<\/p>\n<p>OK, so you wouldn\u2019t believe how many investors that I\u2019ve spoken to over the last five years that have $50,000 to invest. I don\u2019t know why, but I guess it\u2019s a magical number.<\/p>\n<p>Everyone goes out, works hard, lives frugally, and then they save $50,000 and want to start investing in real estate. And that is something that I think is absolutely fantastic. I think you all are troopers for saving that much money to invest in real estate. I also think that is a great amount to get started with real estate investing.<\/p>\n<p>You\u2019ve proven to yourself that you can work hard and live frugally. You can save, and you have aspirations, desires, and dreams of <a href=\"https:\/\/www.biggerpockets.com\/blog\/2016\/03\/28\/financial-freedom\/\" target=\"_blank\" rel=\"noopener noreferrer\">financial freedom<\/a> or making a lot of money in real estate\u2014hopefully to help out your loved ones and create a bigger and better course for your life.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/5h_vCVa8stM\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>How to Invest $50,000 in Real Estate<\/h2>\n<p>Now, here\u2019s the deal. All of you who have $50,000 and want to <a href=\"https:\/\/www.biggerpockets.com\/blog\/2015\/12\/15\/turnkey-real-estate\/\" target=\"_blank\" rel=\"noopener noreferrer\">buy turnkey properties<\/a> or want to purchase buy and hold properties, I am not a fan of that. I\u2019m not a fan, because I think that you\u2019re going to tie up every last penny that you have in a certain amount of real estate that is not going to produce the result that you need to live the life that you want to be living.<\/p>\n<p>Things are getting expensive these days, and there\u2019s a bigger gap between very wealthy people and very poor people. Middle America is superior; I\u2019m sure you\u2019ve seen it plastered all over the news. I\u2019ve read a lot of articles out there, where people have millions of dollars in their bank account but don\u2019t feel rich because their cost of living is probably very high. So, times have changed.<\/p>\n<p>All in all, I don\u2019t feel that taking $50,000 and using leverage to go and buy two to five turnkey properties with debt on every single property is going to give you the cash flow to make a significant dent on your monthly lifestyle. I also don\u2019t believe that taking $50,000 and buying one property with cash is going to get you where you need to be.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/invest-real-estate-low-cost-properties\" target=\"_blank\" rel=\"noopener noreferrer\">Why You Should Only Invest in $50,000 Properties or Less<\/a><\/em><\/p>\n<p>All good things take time. Money makes money. I\u2019m just finishing a book right now, where I\u2019m talking a lot about these things. I just don\u2019t believe in doing something for nothing. I also don\u2019t believe in borrowing a lot of money or leveraging out the wazoo\u2014especially when you don\u2019t know what you\u2019re doing when you\u2019re first starting out.<\/p>\n<p>Using leverage should be for experienced investors. Using leverage should be for investors who understand what expenses come with owning investment properties. And you\u2019re not going to understand those expenses until you\u2019ve been in the game for two to five years.<\/p>\n<p>The furnace screws up, hot water heater blows up, or <a href=\"https:\/\/www.biggerpockets.com\/blog\/2013\/01\/27\/tenant-screening\/\" target=\"_blank\" rel=\"noopener noreferrer\">the tenant vandalizes the property<\/a>. A lot of you guys don\u2019t know these things, and I\u2019m telling you if you don\u2019t think it\u2019s going to happen to you, Uncle Dingo here (or the &#8220;Real Estate Dingo,&#8221; your favorite Aussie) is telling you that it will happen.<\/p>\n<p>Always underestimate your income and overestimate your expenses, which is something that I\u2019ve been saying for a very long time. And always base your investment decisions on a worst-case scenario.<\/p>\n<h2>If You Only Have $50K, DON&#8217;T Do This<\/h2>\n<p>With that said, if you only have $50,000 to your name and you want to go all-in and park every single penny in an investment property&#8230; If you don\u2019t have any reserves set aside for any catastrophe that could happen to you and your loved ones&#8230; I don\u2019t think you should do it.<\/p>\n<p>Guys, don\u2019t invest what you can\u2019t comfortably afford to lose. Always have enough money set aside for an emergency. Please, you have to look after yourself and you have to look after your loved ones. Forget about real estate.<\/p>\n<p>Now that we\u2019ve got that out of the way\u2014you\u2019ve got $50,000, so what do you do? You take that money, and you move to the Midwest.<\/p>\n<p>I\u2019m sorry. There\u2019s no other way that I know of. I did it. I went from Australia to bloody Toledo, Ohio, and I\u2019ve made millions here. I suggest you do something like that.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-87311 size-main-slider\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/03\/Depositphotos_24554261_original-702x336.jpg\" alt=\"\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/03\/Depositphotos_24554261_original-702x336.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/03\/Depositphotos_24554261_original-1078x516.jpg 1078w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p>Find the market, find your niche, and pack up your family (if that\u2019s what you have to do), and remember that nothing comes easy in life. It\u2019s all going to take a lot of work and sacrifice, and it\u2019s not going to happen overnight.<\/p>\n<p>You can take $50,000 and find some amazing properties in the Midwest in Michigan, Indiana, Ohio, Illinois, Kansas, Missouri, and Wisconsin. Guys, there are some amazing B-class properties\u2014even A-class properties\u2014that you could purchase distressed via auction for $20,000 to $40,000. Then, put in $10,000 to $30,000 in rehab.<\/p>\n<p>You could do the work yourself and project manage the job. Then, I think you could sell it for $100,000 or more and make a great profit on the deal. Then, you can rinse and repeat. The more deals that you do, the more money you will accumulate.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/save-money-median-salary\" target=\"_blank\" rel=\"noopener noreferrer\">How to Save $50,000 in 2 Years on a Modest Salary<\/a><\/em><\/p>\n<p>So, the deals are out there, especially in the Midwest. People still want to live here, kids still go to school here, and there are jobs here. This is the market to be in. All of you East and West Coast folks: personally, I would not be investing half a million dollars to make $50,000. That\u2019s too much risk.<\/p>\n<p>I\u2019d rather be investing $50,000 in a market like Toledo, Ohio, to make $30,000. I think that makes so much more sense, and it\u2019s worth the sacrifice and worth the move.<\/p>\n<p>Once you have enough lazy capital lying around, where you do not need it to support your <a href=\"https:\/\/www.biggerpockets.com\/blog\/2014\/01\/07\/flipping-houses\/\" target=\"_blank\" rel=\"noopener noreferrer\">fix and flip efforts<\/a>, use that capital and tie it up in a buy and hold property. Simple as that. Keep buying, fixing and flipping, and remembering money makes money. Accumulate as much of it as you can, and then, once you have lazy capital lying around that you do not need for your fix and flip efforts, park that money in an investment property.<\/p>\n<p>And keep parking that money until you get to the desired cash flow, where you and your loved ones can live the lifestyle that you want to live.<\/p>\n<p>That\u2019s my 0.2 Australian cents. I hope you enjoyed this blog!<\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/real-estate-investing\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-114265\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/4.jpg\" alt=\"ad-ultimate-beginners-guide\" width=\"706\" height=\"125\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/4.jpg 706w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/4-300x53.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/4-702x125.jpg 702w\" sizes=\"auto, (max-width: 706px) 100vw, 706px\" \/><\/a><\/p>\n<p><em>Do you agree or disagree with my opinion? If you disagree, what would you do with $50K?<\/em><\/p>\n<p><strong>I\u2019d love to hear from you in a comment below.<\/strong><\/p>","protected":false},"excerpt":{"rendered":"<p>You\u2019ve proven to yourself that you can work hard and live frugally. You&#8217;ve saved up $50,000, and now you want to invest it in real estate and earn passive income. Here&#8217;s what I think you should do\u2014and should absolutely not do. <\/p>\n","protected":false},"author":1672,"featured_media":119799,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524],"tags":[],"class_list":["post-119951","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-for-beginners"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/119951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/1672"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=119951"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/119951\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/119799"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=119951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=119951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=119951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}