{"id":130908,"date":"2020-10-14T05:00:19","date_gmt":"2020-10-14T11:00:19","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=130908"},"modified":"2023-04-03T05:52:12","modified_gmt":"2023-04-03T11:52:12","slug":"3-ways-start-investing-real-estate-8000","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/3-ways-start-investing-real-estate-8000","title":{"rendered":"3 Ways to Start Investing in Real Estate With Only $8,000"},"content":{"rendered":"<p><iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC8734799112&#038;light=true\" width=\"100%\"><\/iframe><br \/>\nSo, you&#8217;ve got $8,000 to invest in real estate, you&#8217;ve got good credit. How should you use that eight grand to invest?<\/p>\n<p>Well, first, let&#8217;s do some basic math. If you had to put down, let&#8217;s call it 20% on a property\u2014you could buy a $40,000 property and put down a grand. But you&#8217;re also going to need some money for reserves and for closing costs.<\/p>\n<p>With $8,000 to invest in real estate, you&#8217;re not going to find a multifamily and it will even be hard to find a single family for $40,000.<\/p>\n<p>Here&#8217;s the bottom line. If you only have eight grand, you&#8217;re going to have to be looking at <a href=\"https:\/\/www.biggerpockets.com\/blog\/creative-financing\" target=\"_blank\" rel=\"noopener noreferrer\">creative financing<\/a>. Eight thousand dollars is not an inconsequential amount of money. It&#8217;s a good amount of money, but it&#8217;s just not enough to independently go put 20% down.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/invest-real-estate-money-experience\" target=\"_blank\">6 Ways to Invest in Real Estate with Little Money or Experience<\/a><\/em><\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/7aL4fj0w5Mc\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>How I&#8217;d Spend $8,000 to Invest in Real Estate<\/h2>\n<p>Now, a few options.<\/p>\n<h3>1. House Hack<\/h3>\n<p>The first thing I would look at is <a href=\"https:\/\/www.biggerpockets.com\/blog\/2013-04-09-how-to-buy-a-small-multifamily-property\" target=\"_blank\" rel=\"noopener noreferrer\">house hacking<\/a>. If you&#8217;re willing to live in one unit and rent the others out, for $8,000, you could find a duplex.<\/p>\n<p>I don&#8217;t know your market. So maybe this isn&#8217;t reasonable for your market. But if you&#8217;re in a market where you can find a duplex for\u2014I don&#8217;t know\u2014call it 150 grand. You could put 3.5% down, that&#8217;s about $8,000.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/2013-11-02-hack-housing-get-paid-live-free\" target=\"_blank\">House Hacking: A Beginners Guide to Hack Your Housing and Live for Free<\/a><\/em><\/p>\n<p>I&#8217;m not doing the math perfectly in my head, but it&#8217;s about $8,000. Right? So you can get an FHA, 3.5% down loan. You buy a duplex; you live in half of it. You rent the other half out. After a year, you can move out. And now it&#8217;s just a rental property. In the meantime, you&#8217;re living for free (hopefully) because you got a good deal.<\/p>\n<p>So, that&#8217;s the first approach I would take. Let&#8217;s say, you don&#8217;t want a house hack, though.<\/p>\n<p>How do you invest it now?<\/p>\n<h3>2. Education, Marketing, Networking<\/h3>\n<p>Well, you could use $8,000 as your marketing money and your learning money. Now, I&#8217;m not saying go spend a thousand dollars on some get-rich-quick guru, but I would spend that money on things like:<\/p>\n<ul>\n<li><strong>Reading<\/strong> a bunch of books.<\/li>\n<li><strong>Becoming a BiggerPockets Pro member:<\/strong> You can analyze a bunch of deals on there. Analyze at least one or two deals every single day.<\/li>\n<li><strong> Gassing up your car:<\/strong> Drive around looking for property. Look for stuff that seems vacant, or rundown, or multifamily, or any other type you want.<\/li>\n<li><strong>Direct mail marketing:<\/strong> Send out a bunch of letters through direct mail about you buying houses. Send, say, 500 letters every single month. That $8,000 will last you, you know, a long time.<\/li>\n<\/ul>\n<p>So, I would use money for that. And I would plan on using basically no money for your actual investment.<\/p>\n<p>Now, how would you do that?<\/p>\n<p>My preference is typically finding partners. I <a href=\"https:\/\/www.biggerpockets.com\/blog\/networking-tips-popular-biggerpockets\" target=\"_blank\" rel=\"noopener noreferrer\">network to find partners<\/a> who can bring the down payment, and then I bring the great deal. In other words, you&#8217;re using that $8,000 to learn and to find great deals. Now you&#8217;re bringing a great deal to the table, and you&#8217;re going to manage the process, the whole thing.<\/p>\n<p>You could find somebody else who can bring the $20-30,000 for a down payment, and then you just partner together. That&#8217;s the other approach I take.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/2015-12-03-structuring-partnership-rental-properties\" target=\"_blank\" rel=\"noopener noreferrer\">How to Best Structure a Partnership for Investing in Rental Properties<\/a><\/em><\/p>\n<h3>3. Flip<\/h3>\n<p>My final idea is potentially turning that $8,000 into $30,000 by flipping houses. I would go out and take the $8,000 and try to find a house to either flip or a wholesale. Wholesale is like flipping, but you don&#8217;t do the work. You just flip it to another person who&#8217;s going to do the work and you charge a small finder&#8217;s fee.<\/p>\n<p>So, you take this eight grand, you go find a good deal to flip, you flip that property. After taxes and everything, you make, let&#8217;s call it, $30,000. And now you&#8217;ve turned $8,000 into $38,000. Take that $38K, and you can dump that into a multifamily. Or you take that $38K and you do another flip\u2014now you&#8217;ve got $78K. You can really get into a multifamily or do a whole flip now with $80K\u2014at least if you&#8217;re using a hard money lender.<\/p>\n<p>If not, if you can&#8217;t find a lender that will do it for that low down, find a partner who will flip with you. Maybe you put in $8,000 and they put in $8,000, or you just do the work or whatever you&#8217;ve got to do.<\/p>\n<p>Or do a wholesale deal, which doesn&#8217;t require hard money at all. Just find a great deal. Find a buyer like me, somebody who&#8217;s willing to buy it and just upcharge like $5,000 and turn the $8K into $13K. Then turn the $13K into $20K. Then the $20K into $25K.<\/p>\n<p>Get good at finding good deals so you can take that money and just continually increase it, which then you can dump it into multifamily. That&#8217;s what I would do. That&#8217;s how I&#8217;d invest $8,000.<\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/webinars?utm_source=blog\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-91217\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01.jpg\" alt=\"\" width=\"700\" height=\"85\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01-300x36.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em>Thoughts? Questions? <\/em><\/p>\n<p><strong>Let&#8217;s talk below in the comment section.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>So you&#8217;ve got $8,000 to invest in real estate, and you&#8217;ve got good credit. How should you use that eight grand to invest?<\/p>\n","protected":false},"author":710,"featured_media":128099,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524,7119],"tags":[],"class_list":["post-130908","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-for-beginners","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/130908","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\/710"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=130908"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/130908\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/128099"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=130908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=130908"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=130908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}