Starting out with 75k saved up for investments
Member since 2023 · 12 posts · 15 votes
Starting out with 75k saved up for investments
Most Popular Reply
Real Estate Agent · Columbus, OH · Member since 2023 · 161 posts · 217 votes
3yHi @Jacob Ocampo,
I recommend connecting with a good investor-friendly agent in the market you plan to invest in. They should be able to help you find great deals, ideally ones that are listed off-market.
It's best to start investing locally but if the numbers are not working where you live look at investing in other markets. A good place to start would be markets in the Midwest with lots of population growth and job opportunities. I would recommend checking out Columbus OH and Cleveland OH. I invest locally in Columbus and I think we have a great hybrid market of cashflow and appreciation with affordable price points.
27 Replies
- Investor · Coppell, TX · Member since 2018 · 311 posts · 166 votes3y
@Jacob Ocampo welcome to BP! When you say your vacation rental business failed, did you mean STR? Did you figure out why it failed? Every strategy within REI takes work and patience. Choose a REI niche that you like and that will meet your goals. Then become hyper focused on that niche by reading books, learning from podcast, talking to other investors here on BP etc. Don't become impatient and just jump in till you are sure about your strategy. DM me if you like to chat..
- Member since 2023 · 12 posts · 15 votes3y
Quote from @Amir Khan:
@Jacob Ocampo welcome to BP! When you say your vacation rental business failed, did you mean STR? Did you figure out why it failed? Every strategy within REI takes work and patience. Choose a REI niche that you like and that will meet your goals. Then become hyper focused on that niche by reading books, learning from podcast, talking to other investors here on BP etc. Don't become impatient and just jump in till you are sure about your strategy. DM me if you like to chat..
Thank you @Amir Khan!
Yes, it is a STR. It failed due to lack of experience, I think. We jumped into acquiring a cottage prior to pandemic. We got the cottage fully booked, but due to the property issues we ended up spending more on repairs, refunding renters, etc. I wouldn't call it a total loss, since we still made a bit of money on the equity and learned a lot during the process.
I learned my lesson, and taking things a bit slower. Asking people for ideas/advice. I've also picked up a few books on real estate investing (which brought me here).
- Real Estate Agent · San Diego · Member since 2019 · 91 posts · 52 votes3y
Look into the classic house hack strategy. That is where a lot people get their footing with real estate investing. If the area you live in is expensive this becomes all the more powerful. Try to find something that either has extra units (duplex, triplex, etc.) where the added income from renters can help you qualify for the higher purchase price while offsetting your carrying costs, or find a larger fixer where you can get in there, fix it up to add value while also having the space to rent parts of it out, or if the layout makes sense and your area allows for it, split it into two units. If you can't find one in your budget, either start looking further out or get creative in how you are finding properties. If qualifying for a loan is your main hurdle, start talking with lenders now too to see if there are areas in your budget you can cut, like credit card debt, car payments, etc., or other things you can do that can boost your DTI.
Best of luck!
- Member since 2023 · 12 posts · 15 votes3y
Thanks @Edward Dean! I do not have any debts except for my primary residence. The reason for keeping within budget is so I can still have enough buffer in case something happens. I've looked into multi family dwellings too but the downpayment gets higher, this is why I am looking into foreclosures/ tax lien properties. I know most lenders avoid these types of properties. Maybe I should ask in a different category if there are any lenders within my area who work with these properties.
- Real Estate Agent · Columbus, OH · Member since 2023 · 161 posts · 217 votes3y
Hi @Jacob Ocampo,
I recommend connecting with a good investor-friendly agent in the market you plan to invest in. They should be able to help you find great deals, ideally ones that are listed off-market.
It's best to start investing locally but if the numbers are not working where you live look at investing in other markets. A good place to start would be markets in the Midwest with lots of population growth and job opportunities. I would recommend checking out Columbus OH and Cleveland OH. I invest locally in Columbus and I think we have a great hybrid market of cashflow and appreciation with affordable price points.
- Member since 2023 · 12 posts · 15 votes3y
Thanks @Najma Osman!
I will have to look into connecting with an investor friendly agent. Our current agent is pretty good and has helped my wifes sister get a rental property a couple of years ago which is now performing well. However, we havent discussed other options aside from getting a single family home.
I prefer investing locally, since this is going to be my first one and I would like to look closely into it. I will eventually venture out to other locations once I have more cash flow.
- Investor · Denver, CO · Member since 2023 · 161 posts · 52 votes3y
Quote from @Jacob Ocampo:
Hi Everyone,
Like many others who have joined here, I am tired of my 9-5 job and wish to someday be financially free. I had a vacation rental business but failed due to numerous issues with the property and renters. Here I am again trying but with more knowledge and hopefully some support from everyone in here.
In the current market here in south NJ, it is difficult to find a single family home that is within my budget. I have been reading about foreclosures, tax liens, but I find it difficult to understand how I can acquire them. Hoping to get some advice! Thanks in advance!
Have you considered investing in a syndication or a gas and oil mineral rights royalty fund?
- Member since 2023 · 12 posts · 15 votes3y
@Dylan Speer I've thought about partnering with someone to purchase a property. I havent really considered gas and oil mineral rights and Im not too familiar with it. It would be nice to know a bit more about royalty funds to keep my options open.
I'd prefer to start with rental properties and think about the other investment vehicles later on.
- Member since 2023 · 40 posts · 34 votes3y
Hi @Jacob Ocampo,
If you are outpriced in your current market, I recommend long-distance BRRRR. You can find multi-family properties across the US! Non-major metropolitan properties tend to be cheaper; thus, novice investors have an "easier" introduction to real estate investing. For this strategy, you'll need an all-star team of a realtor, lender, contractor, and property manager! Each person should be the best in that market and "boots on the ground".
For foreclosed properties, please do your due diligence before making an offer. At times, there's outstanding actions before you receive the keys. Some actions include footing the bill for unpaid property taxes, code issues, and liens. I recommend talking to local realtors and property attorneys before making an offer. Therefore, you will have the property as "free and clear" as possible. I hope this helps!
- Member since 2023 · 12 posts · 15 votes3y
Thanks @Tommy Nguyen! Looks like theres a lot of responses pertaining to looking outside my area. Although this seems like a really good option its probably going to be something I will have to look into later when I am used to real estate investing.
Thanks for pointing out the things I have to look into for foreclosed properties! - Member since 2023 · 40 posts · 34 votes3y
If you prefer your local area, I suggest "house hacking" through loans that offer lower downpayments but are primary residential loans. These rates may vary from 3.5 to 15%. Talk with multiple lenders to maximize your options. However, down payments below 20% typically require monthly mortgage insurance for the life of the loan. Therefore, it will affect your monthly cash flow.
Solution: When market conditions are appropriate, refinance the loan to conventional. In this action, mortgage insurance is no longer required!
- 3ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Hi Jacob, I know you prefer to look where you are located, but OOS investing may be where it is at for you. It really wouldn't hurt to see where that 75k could go by looking in markets in midwest/south. 75k is a good amount of money to have to start in somewhere like Cincinnati. Small Multifamily, single family, good amount for either here in Cincy. Let me know if you are interested
Sam McCormack Realtor - Member since 2022 · 4 posts · 5 votes3y
Hey Jacob- I definitely understand where you are coming from, the whole NJ market is challenging since we have so little inventory. I mainly invest in Northern NJ but am starting to look more towards Central Jersey, especially Somerset county. Send me a PM and we can talk about your target market/price points and see if we can find you something.
- Member since 2023 · 12 posts · 15 votes3y
Quote from @Tommy Nguyen:
If you prefer your local area, I suggest "house hacking" through loans that offer lower downpayments but are primary residential loans. These rates may vary from 3.5 to 15%. Talk with multiple lenders to maximize your options. However, down payments below 20% typically require monthly mortgage insurance for the life of the loan. Therefore, it will affect your monthly cash flow.
Solution: When market conditions are appropriate, refinance the loan to conventional. In this action, mortgage insurance is no longer required!
Unfortunately, I already have a loan for my primary residence. And I agree with the mortgage insurance. I'd rather put the payment for insurance into the mortagage payment however little it is.
- Member since 2023 · 12 posts · 15 votes3y
Quote from @Sam McCormack:
Hi Jacob, I know you prefer to look where you are located, but OOS investing may be where it is at for you. It really wouldn't hurt to see where that 75k could go by looking in markets in midwest/south. 75k is a good amount of money to have to start in somewhere like Cincinnati. Small Multifamily, single family, good amount for either here in Cincy. Let me know if you are interested
Thanks Sam! For now I will try and get something within my area. I will reach out to you when I look for properties in OH.
- 3yAlan AsriantsBusiness MemberReal Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
@Jacob Ocampo Hey Jacob, have you thought about investing in the Greater Phila area, Multifamily here is more affordable.
I'd be happy to chat and share my experience investing in this area. It's only a bridge away!
Reach out anytime!
Alan Asriants - New Century Real Estate 590 Reviews - Columbus, OH · Member since 2023 · 427 posts · 254 votes3y
Hey Jacob, have you considered investing out of state? I'd recommend reading "Long Distance Investing" by David Greene if you're interested.
Otherwise, there's a few good ways to find discounted prices. Look for vacancies, this is commonly called "driving for dollars." Every time you see a vacant house, a boarded house, tall grass, broken windows, etc. take down the address. From there, get creative and try to contact the owner. Other methods for distressed properties you can find at a discount- For sale by owner, foreclosures, probates. Try and find home owners that have a motivation to sell, and are looking for a fast closing. These are the sellers that will go below market. As you mentioned, liens are another motivation for sellers in some cases.
- Rental Property Investor · Philadelphia, PA · Member since 2015 · 479 posts · 362 votes3y
@Jacob Ocampo something I learned after years of RE investing is to try to always have a pivot plan. I am sorry you had a "failure" with the STR but then I wonder why it could not somehow have been salvaged through a pivot. I see that many people (probably most) go into STR without really understanding the business and the multitude of risks or how it differs from more traditional RE investing. They get blinded by the numbers - earn a month's rent in 3 days. . . Except that it's not exactly that simple ot consistent. S. Jersey surely has some opportunities as do other markets within driving distance. It all depends on what your resources are, your risk tolerance, your patience . . . The market continuously evolves - -what I would have suggested just a few years ago is totally irrelevant today. So make sure you are learning from updated resources and books, podcasts, courses, gurus whomever - that understand today's situation and can guide you to matching your personal situation to the opportunities that exist now.
- 3yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
not to discourage you... but it's a long path to replace steady W2 income with passive income from rentals, and it's gotten even tougher in the last few years. check out the most recent seeing Greene podcast on BP - David Greene goes over it pretty well.
don't start out with anything long-distance or exotic.
start locally. if south NJ is too expensive find a market you can drive to that isn't. house hack if you can.
hope this helps.
- Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes3y
What is your current living situation? How about a 3 or 4 family house hack?
- Member since 2023 · 12 posts · 15 votes3y
Quote from @Account Closed:
Hey Jacob, have you considered investing out of state? I'd recommend reading "Long Distance Investing" by David Greene if you're interested.
Otherwise, there's a few good ways to find discounted prices. Look for vacancies, this is commonly called "driving for dollars." Every time you see a vacant house, a boarded house, tall grass, broken windows, etc. take down the address. From there, get creative and try to contact the owner. Other methods for distressed properties you can find at a discount- For sale by owner, foreclosures, probates. Try and find home owners that have a motivation to sell, and are looking for a fast closing. These are the sellers that will go below market. As you mentioned, liens are another motivation for sellers in some cases.
Thanks! I will read that book. I haven't really looked at vacancies, but for now I do not think looking for properties that needs a lot of work is a good option for me. I dont mind doing cosmetic changes since I am handy, but I dont want to take on a big project right away. Thanks for the advice.
- Columbus, OH · Member since 2023 · 427 posts · 254 votes3yUnderstandable, most boarded homes need a lot of work. Regardless, distressed properties are a great way to buy value, and create equity in year 1 by getting it up to ARV.
Quote from @Jacob Ocampo:
Quote from @Account Closed:
Hey Jacob, have you considered investing out of state? I'd recommend reading "Long Distance Investing" by David Greene if you're interested.
Otherwise, there's a few good ways to find discounted prices. Look for vacancies, this is commonly called "driving for dollars." Every time you see a vacant house, a boarded house, tall grass, broken windows, etc. take down the address. From there, get creative and try to contact the owner. Other methods for distressed properties you can find at a discount- For sale by owner, foreclosures, probates. Try and find home owners that have a motivation to sell, and are looking for a fast closing. These are the sellers that will go below market. As you mentioned, liens are another motivation for sellers in some cases.
Thanks! I will read that book. I haven't really looked at vacancies, but for now I do not think looking for properties that needs a lot of work is a good option for me. I dont mind doing cosmetic changes since I am handy, but I dont want to take on a big project right away. Thanks for the advice.
- Member since 2023 · 12 posts · 15 votes3y
Quote from @Sheryl Sitman:
@Jacob Ocampo something I learned after years of RE investing is to try to always have a pivot plan. I am sorry you had a "failure" with the STR but then I wonder why it could not somehow have been salvaged through a pivot. I see that many people (probably most) go into STR without really understanding the business and the multitude of risks or how it differs from more traditional RE investing. They get blinded by the numbers - earn a month's rent in 3 days. . . Except that it's not exactly that simple ot consistent. S. Jersey surely has some opportunities as do other markets within driving distance. It all depends on what your resources are, your risk tolerance, your patience . . . The market continuously evolves - -what I would have suggested just a few years ago is totally irrelevant today. So make sure you are learning from updated resources and books, podcasts, courses, gurus whomever - that understand today's situation and can guide you to matching your personal situation to the opportunities that exist now.
Thanks!
It was a vote with my other partners to sell. The property was old and required a lot of maintenance. It was also far from us and we cant find a replacement property manager. We thought of other things to get it to work, but after a year of losing money we all decided to sell it.
Since I am starting again, I want a property thats near me to save cost on the property manager. I also want to have a hands on experience to understand what is required to run a LTR.
- Member since 2023 · 12 posts · 15 votes3y
Quote from @Nicholas L.:
not to discourage you... but it's a long path to replace steady W2 income with passive income from rentals, and it's gotten even tougher in the last few years. check out the most recent seeing Greene podcast on BP - David Greene goes over it pretty well.
don't start out with anything long-distance or exotic.
start locally. if south NJ is too expensive find a market you can drive to that isn't. house hack if you can.
hope this helps.
I understand that. I am not thinking short term, but more so preparing for the future. I dont know many investment vehicles aside from 401k and RE. Im sure there are quicker ways of making more money, but I want something thats a bit more secure. Having said that, I am ready for the long haul.
- Member since 2023 · 12 posts · 15 votes3y
Quote from @Bud Gaffney:
What is your current living situation? How about a 3 or 4 family house hack?
I am not sure what you mean by living situation. I have a primary residence and I do not think house hacking will work. Any ideas?
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