{"id":98496,"date":"2020-09-06T05:00:41","date_gmt":"2020-09-06T11:00:41","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=98496"},"modified":"2021-03-16T13:53:47","modified_gmt":"2021-03-16T19:53:47","slug":"start-investing-real-estate-20000","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/start-investing-real-estate-20000","title":{"rendered":"How to Start Investing in Real Estate With Only $20,000"},"content":{"rendered":"<p>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.<\/p>\n<p>I did exactly that. I moved from Australia to Kansas City (of all 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.<\/p>\n<p>That was one of the first deals that I ever did in the U.S. real estate market.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/O33XiXBiMPE\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>Where Can I Find Affordable Deals?<\/h2>\n<p><span style=\"font-weight: 400;\">Now, you\u2019re probably thinking, &#8220;That&#8217;s great, but how do I do that in my area because there are only $500,000 properties?&#8221; <\/span><\/p>\n<p><span style=\"font-weight: 400;\">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\u2019m sorry, but there is no other way to put it. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">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\u2019t know how you can make money in those markets. I don\u2019t believe in using a ton of leverage, and I don\u2019t 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. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">So be patient. Find a distressed asset, <a href=\"\/renewsblog\/invest-mid-west\/\" target=\"_blank\" rel=\"noopener noreferrer\">preferably in the Midwest because there are a lot of cheap properties there<\/a>. You\u2019re probably not going to be able to get an A or B-class property; you\u2019re probably going to have to go into a C or D-class property. But that is not the end of the world. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You need to learn somewhere, and the lower the amount of money you invest, the lower your risk is.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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&#8217;s not the stats and demographics of a particular area. <em>It is the people.<\/em><\/span><\/p>\n<p><span style=\"font-weight: 400;\"> 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. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, it is very important that you surround yourself with the right people who can help you on your real estate journey. Let\u2019s fast forward now.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-119132 size-main-slider\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/11\/college-debt-702x336.jpg\" alt=\"Calm asian student girl sitting at desk resting after studying\" width=\"702\" height=\"336\" title=\"\"><\/p>\n<h2>Distressed Real Estate<\/h2>\n<p><span style=\"font-weight: 400;\">So, the Midwest has some great opportunities\u2014a lot of foreclosures\u2014and it makes me feel like a kid in the candy store. Deals are falling off trees. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Buy a distressed property, negotiate well, be patient, and find the right deal. Fix it as best you can. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I know you just started and you don\u2019t 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\u2019t care if you have to sleep at the property\u2014just do it. Hard work and sacrifice\u2014never forget that.<\/span><br \/>\n<em><br \/>\n<strong>Related:<\/strong> <a href=\"\/renewsblog\/2015\/04\/08\/buy-several-cheap-or-a-few-pricier-houses-investors-analysis\/\" target=\"_blank\" rel=\"noopener noreferrer\">Should I Buy Several Cheap or a Few Pricier Houses? An Investor\u2019s Analysis<\/a><\/em><\/p>\n<p><span style=\"font-weight: 400;\">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.<\/span><span style=\"font-weight: 400;\"> Just keep doing that over and over and over. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fast forward to today, and I\u2019ve done 500-plus real estate deals. I\u2019m doing exactly what I\u2019m telling you guys, just not in C and D-class areas anymore. I\u2019m 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. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are many other ways to make money in real estate, so please take what I\u2019m 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\u2019re selling it to is a great way to start. Then, you\u2019re off to the races!<\/span><\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/real-estate-investment-calculator?utm_source=blog\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-91220 size-full\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02.jpg\" alt=\"\" width=\"700\" height=\"85\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02-300x36.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em><span style=\"font-weight: 400;\">Anyone else with $20,000 strategies? I want to hear them. <\/span><\/em><\/p>\n<p><strong>Please comment below.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you have $20,000, where should you start looking for a deal? Get one investor&#8217;s take on the best way to get in the game with little working capital.<\/p>\n","protected":false},"author":1672,"featured_media":123092,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524],"tags":[],"class_list":["post-98496","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\/98496","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=98496"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/98496\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/123092"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=98496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=98496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=98496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}