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Newbie Post Looking for Advice

Nyoka Gilchrist
New to Real Estate · AL · Member since 2022 · 5 posts · 0 votes

Hey BiggerPockets! I am excited to jump into the pool of real estate! I'm being offered a personal unsecured loan to start investing.  Question: What do you all think about taking a $30,000 loan to invest in gaining a rental property at 11.99% interest? 

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  • Joe HomsBusiness Member
    Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
    4y

    @Nyoka Gilchrist I guess it's what can you buy for that amount of money in AL.  In California that is what a dog house would cost.  Seriously, if your market is way lower, then use that money to buy a distressed property, fix it up, then refinance it and pay off this high interest rate loan with a lower long term loan.  Then do it all over again.  Do they sell homes in your area for $30K or less?

    Good Investing...

    [email protected]949-625-4533
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  • Nyoka Gilchrist
    OP
    New to Real Estate · AL · Member since 2022 · 5 posts · 0 votes
    4y

    @Joe Homs I havent seen any listings for 30K but I havent really started combing listings yet.

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    4y

    Paying 12% for 30k isn't going to help you get started for the most part, it's more likely to dig you a hole. Are you hoping to buy a property for 30k that will actually make money? Do you have other money for rehabbing it? What do you want to buy a property for right now?

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  • Nyoka Gilchrist
    OP
    New to Real Estate · AL · Member since 2022 · 5 posts · 0 votes
    4y

    @Jonathan Greene I thought I would use the cash for a down payment on a rental property.  Just thinking  another possibility could be I finance a rehab and use the part of the 30K to rehab and then flip?

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  • Tony Mai
    Rental Property Investor · Los Angeles, CA · Member since 2016 · 137 posts · 80 votes
    4y

    If you are going to invest in real estate it is best to use cheap money.  The cheapest money is your own savings since you do not charge yourself interest from using your own money.  Since you are just starting out I would highly recommend leaning about how much money you can borrow and at what rate.  Seek out and speak to a lender about your buying power options then decide where to go from there!  Good luck! 

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  • Nyoka Gilchrist
    OP
    New to Real Estate · AL · Member since 2022 · 5 posts · 0 votes
    4y

    @Tony Mai Thank you!

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  • Nyoka Gilchrist
    OP
    New to Real Estate · AL · Member since 2022 · 5 posts · 0 votes
    4y

    I very rarely see properties for $30,000.  I expect it would be in very bad shape.

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