How would you start investing if you had $150k???

Charlotte, North Carolina
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How would you start investing if you had $150k???

Jeff Hines
Member since 2023 · 9 posts · 22 votes

Hey everyone,

I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

  1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
  2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
  3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

Are there any other no documentation loans other than DSCR loans that I should look into?

If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y

@Jeff Hines

-do whatever it takes to be able to start with a house hack, then

-house hack, then

-repeat

happy to answer any questions you have about BRRRR but i would not recommend starting with an all cash OOS BRRRR. that is just a really tough first at bat.

13Reply
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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Jeff Hines

    -do whatever it takes to be able to start with a house hack, then

    -house hack, then

    -repeat

    happy to answer any questions you have about BRRRR but i would not recommend starting with an all cash OOS BRRRR. that is just a really tough first at bat.

    13Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    2y
    Quote from @Jeff Hines:

    Hey everyone,

    I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

    My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

    1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
    2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
    3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

    Are there any other no documentation loans other than DSCR loans that I should look into?

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!


    Best advice I can give you is take your time and get the foundation of your burgeoning empire set before you get into DSCR loans.

    Conventional financing is the least expensive out there. Exhaust all of your conventional or government financing options before you get into DSCR. DSCR will impact your debt to income ratio and it could impact it negatively.

    Once you get your W2 situation straight, buy a small multi family and live in it for a year. You can use FHA or conventional financing for that. Do that a couple times until you can't. Once that avenue is exhausted, go the single family route using conventional or government financing. Again, once you can't do that anymore THEN use DSCR.

    You're in a great position, but using the wrong type of financing in the beginning could impede the growth of your portfolio.

    All the best

    Stephanie

    5Reply
  • Marcus R.
    Real Estate Agent · Denver CO · Member since 2019 · 210 posts · 332 votes
    2y

    Agree with @Nicholas L., start with a house hack in Charlotte or NC.  I'm out in Denver but have family in NC and from what I've seen it seems like a fantastic market.

    In addition, if you house hack there are programs like NACA that will help you qualify.

    4Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    2y
    Quote from @Jeff Hines:

    Hey everyone,

    I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

    My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

    1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
    2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
    3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

    Are there any other no documentation loans other than DSCR loans that I should look into?

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!


     I did a house hack in Columbus, Ohio. I would do that

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  • Jeff Hines
    OP
    Member since 2023 · 9 posts · 22 votes
    2y
    Quote from @Nicholas L.:

    @Jeff Hines

    -do whatever it takes to be able to start with a house hack, then

    -house hack, then

    -repeat

    happy to answer any questions you have about BRRRR but i would not recommend starting with an all cash OOS BRRRR. that is just a really tough first at bat.


     I definitely would be into house hacking if I was single, but I think it would be hard to convince my wife to agree to having someone stay in our has. 

    How do you feel about a getting my first property with a DSCR loan?

    0Reply
  • Jeff Hines
    OP
    Member since 2023 · 9 posts · 22 votes
    2y
    Quote from @Stephanie P.:
    Quote from @Jeff Hines:

    Hey everyone,

    I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

    My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

    1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
    2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
    3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

    Are there any other no documentation loans other than DSCR loans that I should look into?

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!


    Best advice I can give you is take your time and get the foundation of your burgeoning empire set before you get into DSCR loans.

    Conventional financing is the least expensive out there. Exhaust all of your conventional or government financing options before you get into DSCR. DSCR will impact your debt to income ratio and it could impact it negatively.

    Once you get your W2 situation straight, buy a small multi family and live in it for a year. You can use FHA or conventional financing for that. Do that a couple times until you can't. Once that avenue is exhausted, go the single family route using conventional or government financing. Again, once you can't do that anymore THEN use DSCR.

    You're in a great position, but using the wrong type of financing in the beginning could impede the growth of your portfolio.

    All the best

    Stephanie


    I would definitely like to start with a multi-family home but I currently live in Charlotte and can’t afford a Multi family at the moment. I also only make about 40k a year currently which doesn’t give me much buying power. 

    I know DSCR could affect my DTI, maybe if I put it under a llc and sign as the guarantor could I work around it affect me personally?

    0Reply
  • Jeff Hines
    OP
    Member since 2023 · 9 posts · 22 votes
    2y
    Quote from @Marcus R.:

    Agree with @Nicholas L., start with a house hack in Charlotte or NC.  I'm out in Denver but have family in NC and from what I've seen it seems like a fantastic market.

    In addition, if you house hack there are programs like NACA that will help you qualify.

     I would be down to house hack but I currently live in Charlotte and wouldn’t be able to afford much real estate here 

    0Reply
  • Jeff Hines
    OP
    Member since 2023 · 9 posts · 22 votes
    2y
    Quote from @Account Closed:
    Quote from @Jeff Hines:

    Hey everyone,

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!

    I always ask the question of a new investor: "Do you want to go the traditional route and pay 20% down for a property that cash flows $100 to $200 a month" which is relatively easy to do and buy 1 house and then wait a couple of years until you have enough for the next property, with rising real estate costs

    or "Do you want to learn how to buy multiple houses using Creative Finance that cash flow $300 - $500 a month with no limit on the number of houses you can buy" but requires learning how and taking advantage of the rising real estate values?

    The direction I point people depends on their answer.


     I would definitely choose option 2, what type of creative financing are you talking about? 

    0Reply
  • Jeff Hines
    OP
    Member since 2023 · 9 posts · 22 votes
    2y
    Quote from @Remington Lyman:
    Quote from @Jeff Hines:

    Hey everyone,

    I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

    My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

    1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
    2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
    3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

    Are there any other no documentation loans other than DSCR loans that I should look into?

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!


     I did a house hack in Columbus, Ohio. I would do that

    I would be down to house hack but I can’t afford a home here in Charlotte quite yet. How did you purchase the home in Columbus? 
    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Jeff Hines

    whatever you end up doing i'd stay local. i know the markets you mentioned look tempting, but they have their own challenges - for example, the midwest housing stock is very old and often has severe deferred maintenance. we have houses where the rehab amount > the ARV. i believe charlotte is around the US median.

    the reason i mentioned house hacking was because you mentioned an FHA loan. you could certainly just buy a place with an FHA loan, live in it, then refinance and repeat.

    2Reply
  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    2y

    @Jeff Hines

    Q: How would you start investing if you had $150k???

    A: I'd start by reading up on the previous 42,367 post's made this month asking "If/I have $_____, how should I start investing" and not assume post 42,368 would bring any radical earth moving change to the answers.

    4Reply
  • Rafael Trinidad
    New to Real Estate · ORLANDO · Member since 2018 · 51 posts · 5 votes
    2y

    The naca program will permit single home 

    Duplex , triplex , four plex  so you can live with your wife in one town house and rent the rest 

    1Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    2y
    Quote from @Jeff Hines:

    Hey everyone,

    I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

    My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

    1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
    2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
    3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

    Are there any other no documentation loans other than DSCR loans that I should look into?

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!


     Saw Ohio was on your short list. If you end up in Ohio I'd imagine you'd look at Cleveland as it's the cheapest. With $150k you can get into several duplexes. If you want more info on Cleveland you should read The Ultimate Guide to Grading Cleveland Neighborhoods.

    1Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    2y
    Quote from @Jeff Hines:

    Hey everyone,

    I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

    My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

    1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
    2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
    3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

    Are there any other no documentation loans other than DSCR loans that I should look into?

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!


    You should definitely wait so you can leverage an FHA loan. You can expect, if you are a good investor to consistently get 6% cash on cash returns from your Capital. So if you have $150,000 to invest you can make $9,000 annually.

    Most people will never retire from owning Real Estate unless they substantially cut their cost of living.  You should look at investing in Real Estate like you look at investing in a stock.  They can help you retire sooner and better, but the chances you are the unicorn that can turn $150,000 into life on the beach with passive income is slim.

    I own 60+ doors and have been investing for 10+ years and cannot retire.  I have solid cash flow, but i make more money from service type business's, like property management, construction and Realty services.  Those service business's are for people that are too busy working to manage their own rentals.  They are using RE for depreciation, cost seg, etc... but are not going to retire off of it.  That is a more realistic and frankly better approach. 

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  • Timothy Howdeshell
    Investor · Fresno, CA · Member since 2016 · 222 posts · 237 votes
    2y
    Quote from @Jeff Hines:

    Hey everyone,

    I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

    My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

    1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
    2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
    3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

    Are there any other no documentation loans other than DSCR loans that I should look into?

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!


     It sounds like you're in a great position and just need a little more time to qualify for conventional financing. I can tell by your language that you're fairly well versed in the basic financing for real estate. And the fact that you have 6-months of expenses saved up prior to inheritance tells me that you're disciplined and decent with money (this is relatively rare). So you have a lot going for you. 

    I can't advise you on what to do specifically. If I were in your shoes I would simply look for a co-signer to a loan and look for a small-multi family in your home town where you can house hack. It could be a single family as well, but with your cash position it seems favorable to go a little bigger. The drivers of wealth in real estate favor scale (appreciation, depreciation, and loan paydown; cash-flow should be easier with more units as well due to economies of scale). 

    The rules on multi-family owner occupied recently changed allowing you to put down as little as 3.5% on up to 4 units. You just need to get that co-signer (rich uncle?). I would start by thinking through who can serve that role for you. Next, go and speak to at least 5 lenders, explain your situation and let them advise you on how to make it happen. 

    I wouldn't recommend an all-cash purchase, especially out of state as this will deplete your cash reserves (please don't go buy an $80k rental in the hood :-D ). There are other concerns with this approach, but 50% down on a ready to go $150k rental in a cheaper area? Could be a good fit. Get into a property with less upside, but less risk. Then when you're skilled up and confident you can take your remaining non-emergency, non-reserves cash and scale more aggressively. 

    As a point of clarification, DSCR loans don't require a higher down payment than conventional, they just have different underwriting criteria and less concern on your personal financial situation. Rates and fees are higher though. That's for sure.

    Be careful being eager to spend the money. You'll read a lot about how cash is trash and if you don't invest you're losing money. There is some truth to that, but that rhetoric largely came out of a massively long bull market with historically low rates. Today you can get 5% in a high-yield savings account, take it slow, and plot out your moves to do this thing right. 

    Good luck!

    4Reply
  • Danny RandazzoPro Member
    Apartment Syndicator · Charleston, SC · Member since 2016 · 973 posts · 728 votes
    2y

    @Jeff Hines you should get started now and don’t wait. There are good deals available during all markets cycles so you’ll just have to work hard to find a good one. I love your goal to build up enough cash flow to replace your income! If you find some good deals you could use debt to acquire more doors to get you to your cash flow number faster (your option 2). You should make sure to have a good network or mentor to help you while you are getting started.

    0Reply
  • Brandon Bowling
    Member since 2022 · 1 post · 0 votes
    2y
    Quote from @Account Closed:
    Quote from @Jeff Hines:

    Hey everyone,

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!

    I always ask the question of a new investor: "Do you want to go the traditional route and pay 20% down for a property that cash flows $100 to $200 a month" which is relatively easy to do and buy 1 house and then wait a couple of years until you have enough for the next property, with rising real estate costs

    or "Do you want to learn how to buy multiple houses using Creative Finance that cash flow $300 - $500 a month with no limit on the number of houses you can buy" but requires learning how and taking advantage of the rising real estate values?

    The direction I point people depends on their answer.

    As a new real estate investor myself I am very interested in your “creative financing” can you please explain? 
    0Reply
  • Benjamin Sulka
    Cleveland, OH · Member since 2022 · 826 posts · 578 votes
    2y

    Jeff, 

    There is nothing wrong with waiting a little bit. Consider waiting until you can qualify for a mortgage and go after a 2-4 unit multifamily. Put 5% down through the newly release Fannie Mae conventional program for 2-4 units. 

    You will be able to retain much of your capital and house hacking will allow you to learn how to landlord and how to own real estate. This is the route that I'm taking once I hit my saving goal. 

    Do you have much debt currently? I know you said you're making $40k per year but depending on your debt, you might still be able to qualify for financing. 

    Some stuff to think about.

    All the best! 

    2Reply
  • David Cianci
    Investor · Harrisonburg Virginia · Member since 2023 · 40 posts · 23 votes
    2y
    Quote from @Account Closed:
    Quote from @Jeff Hines:

    Hey everyone,

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!

    I always ask the question of a new investor: "Do you want to go the traditional route and pay 20% down for a property that cash flows $100 to $200 a month" which is relatively easy to do and buy 1 house and then wait a couple of years until you have enough for the next property, with rising real estate costs

    or "Do you want to learn how to buy multiple houses using Creative Finance that cash flow $300 - $500 a month with no limit on the number of houses you can buy" but requires learning how and taking advantage of the rising real estate values?

    The direction I point people depends on their answer.


     Hey Ken,

    As someone who is looking to break into real estate investing within the next month, how would you best recommend proceeding with your latter example you gave? 

    I see in todays markets it is much more difficult to find good BRRRRs that are cash flowing at 500+ per month than it was in previous years, what are you doing to be able get that? 

    I would love to learn more about what it will take and how to take advantage of the rising real estate values!

    0Reply
  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    2y

    @Jeff Hines North Carolina is a fantastic market. I would invest there before going out of state, but I wouldn’t invest in Charlotte.

    My business partner and I bought 50 properties in the triad area of North Carolina. We connected with several wholesalers there and we were able to buy a lot of properties under market value. Then, after we fixed them up we were able to create equity in the properties and when we refinanced them we were able to get the majority of our money back out of them. Your basic BRRRR. But we also added lease options to our model which attracted a better tenant and lessened the the amount of work that it took to manage the lease option properties.

    So I would encourage you consider investing in your own back yard before going out of state, especially if you live in North Carolina. 

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  • Samuel CoronadoPro Member
    Investor · Huntsville, AL · Member since 2016 · 348 posts · 182 votes
    2y

    @Jeff Hines I invest in mobile home parks. I could do a lot with 150k if you want boots on the ground in Alabama. I am in Huntsville, voted #1 place to live by several publications such as Kiplinger's and USA Today.

    0Reply
  • Sean Maloney
    Specialist · Erie Pennsylvania · Member since 2023 · 30 posts · 12 votes
    2y

    Just my opinion

    Pretend like you have no money. The skills of building a business with out easy money will be worth more later. 

    I would use the 150K and be a hard money lender for others you would gain the net working with them and the interest you get back put that towards your business for marketing and growth. Simple rich dad approach have your asset in your case 150k cash make money then use that to build your business and other things you want. There are lots of opportunities out there that only a few thousand is needed (10k or less). 150k can go along way if you are playing the game smart. In the end its your money and other peoples advice is great but you will figure it out if you just keep searching for what path you want to be on. You got this!


    - Sean

    1Reply
  • Ricardo Hidalgo
    Real Estate Agent · Member since 2019 · 569 posts · 257 votes
    2y
    Quote from @Jeff Hines:

    Hey everyone,

    I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

    My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

    1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
    2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
    3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

    Are there any other no documentation loans other than DSCR loans that I should look into?

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!

     Learn to scale that money. Do not get stuck with sub par returns. Learn to outperform the market by looking at property entry values and resale values based on improvement. Im 27 and I turn 100k to 650k in 2 years by doing this. 

    1Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    2y
    Quote from @Jeff Hines:
    Quote from @Stephanie P.:
    Quote from @Jeff Hines:

    Hey everyone,

    I am a 28 year old who currently lives in NC. I just want to explain my circumstances and see how people with experience and knowledge in real estate would move forward if they were in my shoes. I have $150k in cash that I received from an inheritance and would like to use it to invest in real estate(I already have 6 months of reserves of my own money saved). I also have a credit score of 756.

    My overall goal is to buy enough doors to supplement working full time so one day I can focus full-time on becoming an entrepreneur. I know that will take some time but I would like to get started ASAP! I took a few years out of work to take care and spend time with a family member whp passed, so I have only been working for a year now. This has caused me to have trouble with getting approved for loans/mortgages due to my work gap. I have done some research and have found a few ways I could possibly start investing in real estate. If you would take a different route than the ones I’m going to list below please let me know.

    1. Since I can’t afford to pay cash for a home here in North Carolina, pay cash for a home in places like Detroit, Alabama, or Ohio. I would then renovate, rent, and refinance. Rinse and repeat this process over time.
    2. Instead of paying cash use that money and spread them over multiple dscr loan so I can own more doors and just collect the cash flow after expenses.
    3. Wait another year so I can have two years of work history/W-2s. This would increase my chances of being approved for a FHA loan. This would allow me to save money compared to paying cash or the huge Down-payment DSCR loans require.

    Are there any other no documentation loans other than DSCR loans that I should look into?

    If anyone has any advice or recommendations on how you would get started in real estate if you were in my shoes please let me know any and all suggestions would be greatly appreciated!


    Best advice I can give you is take your time and get the foundation of your burgeoning empire set before you get into DSCR loans.

    Conventional financing is the least expensive out there. Exhaust all of your conventional or government financing options before you get into DSCR. DSCR will impact your debt to income ratio and it could impact it negatively.

    Once you get your W2 situation straight, buy a small multi family and live in it for a year. You can use FHA or conventional financing for that. Do that a couple times until you can't. Once that avenue is exhausted, go the single family route using conventional or government financing. Again, once you can't do that anymore THEN use DSCR.

    You're in a great position, but using the wrong type of financing in the beginning could impede the growth of your portfolio.

    All the best

    Stephanie


    I would definitely like to start with a multi-family home but I currently live in Charlotte and can’t afford a Multi family at the moment. I also only make about 40k a year currently which doesn’t give me much buying power. 

    I know DSCR could affect my DTI, maybe if I put it under a llc and sign as the guarantor could I work around it affect me personally?


    If you put the DSCR loan under your LLC, it will still affect your debt to income ratio BECAUSE you'll sign a personal guarantee. The LLC is a pass through entity and will show up on your personal Schedule E and once the property shows up on the LLC, the debt (that probably won't show on your personal credit report) will be included in your total debt. The income will too, but the whole point of owning properties is to avoid taxes, so you'll write off as much as you can and that won't help offset the debt.

    I don't know what to tell you about the Charlotte area. I know it's expensive, but look at something in the smaller towns outside Charlotte or probate sales or start going to REIA's and Meet ups and find some investors or people trying to sell fixer upper. You're a prime candidate for an FHA 203K loan.

    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y

    There's a ton of these posts, saying I have $X amount how should I invest. I appreciate you saying you got it from inheritance and have 6 months reserves, but a lot needs to be answered and I am not going to sift to most of the other posts:

    1) How is your W2 income?
    2) What is your debt situation?
    3) Are you single, married, or about to be married?
    4) Do you have kids or plan to?

    If you're 28, in a relationship or single but no plans to marry then I would househack locally. Because that money is inheritance and not from W2 or a reoccurring source, you really cannot bank on that. You have to use your bullets even more wisely. I am usually against house hacking cause it's really detrimental for family formations, but again read the pre-req to house hacking. And no you won't be able to put 5% down and do it a year later. It'll take 3-7 years of waiting. My recommendation is to put 10-15% down depending on how much (cosmetic) rehab you need,, sit on it for 3-5 years. Fix & live in both units to get it up to par. By year 5-7 save up enough money to buy a real SFH if your plans change or look for other investment properties.

    If you're 28, married or about to be and plan to have kids. Eliminate all your bad debt first, prepare your savings even deeper and put it on a downpayment for a single family house if you do not have one. Buy based off of your W2 income, let this inheritance help towards the downpayment. If you're interested in REI later, save up and prepare for it.

    Don't risk your familys wellbeing for it, because you'll end up losing them and not being a REI.

    1Reply
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