4 PLEX investing - Big down payment limits you ?

Question

Hello Everyone..

I am new to bigger pockets! Very excited to be here! I am starting my real estate journey with my husband. We are thinking of a 4 plex to buy. Where are the best affordable cities? And more than anything my concern is, if we buy one in the range of 500 k, now a down payment comes down to about 120 k.. because you have to put 25% down, then how do you buy a few more, without having to put down such big down payments? This limits you from investing more at once?

Would really appreciate your help here !

Thanks

Sashika

Sashika De Silva · Answer

@Sharon Mittelman well I have other businesses.. :) but I want to move away from some of them..   Things take take time.. but since I have achieved a lot in my life in very short times, not short cuts.. I work towards goals pretty fast.. :)

Sharon Mittelman · Answer

@Sashika De Silva Welcome to Bigger Pockets. Few things :

1. In my humble opinion you should not try and buy many of them in the same time (when you are just starting). I bought 4 SFRs when I started but all 4 cost me only $150K. It was great at the beginning - I was making 16 to 20% on a yearly basis. That changed after 6 months when one tenant stopped paying, then a 2ns one stopped and than one roof needed repair...I went from positive cashflow to negative $20K. Thankfully I was not over extended so I was able to weather the storm.

In other words you might want to pace yourself.

2. If you learn how to buy the houses at a discount , and refi after a while you can get most if not all of your money out for the next project. It takes time but it is very doable

Good luck

Sharon Mittelman · Answer

@Sashika De Silva don't expect to be a millionaire in a short time. It took me way longer to get my 1st deal than anything else. I have done over than 150 transactions in 5.5 years. in my 1st year I did less than 10 !

Sashika De Silva · Answer

@Sharon Mittelman thanks a lot for your humble advice. Sure I agree with you. I will buy one first.. What I wanted to know was how do you keep buying without having to wait for longer periods.. :) but yes I get it.. and honestly this is great valuable info! But now it is very hard to find such low good duplex/ 4 plex at such low prices !