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.

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  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y
    Quote from @Ricardo Hidalgo:
    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. 

     Did you do it in 2020-2022? If so, that has very little merit. There's miserable fix & flips that came out heavily in the green.

    0Reply
  • Ricardo Hidalgo
    Real Estate Agent · Member since 2019 · 569 posts · 257 votes
    2y
    Quote from @V.G Jason:
    Quote from @Ricardo Hidalgo:
    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. 

     Did you do it in 2020-2022? If so, that has very little merit. There's miserable fix & flips that came out heavily in the green.


    Beginning of 2022 until now and made 6 figure profits this year regardless of market. I would say the portfolio I am guiding and managing with clients is over 20 million with most of the acquisitions made in the last 3-6 months. We have seen a 20-25% return on the money since then. 

    0Reply
  • Michael Haynes
    Investor · Tampa, FL · Member since 2016 · 681 posts · 288 votes
    2y

    Hello Jeff Hines in North Carolina. You say you do have a JOB that nets you $40,000 a year? After Taxes etc? Does that mean you studied and have a Profession or a Degree? My older RE friend's son studied to be an RN at 28, finally moved out of the house and he is making $1000 a day in Naples, Florida at the Hospital. You inherited $150,000. Do you know how to Invest that money? You can make more per Month than buying a 1/1 or 2/1 fixer-upper house making $100 a Month per door, by buying Monthly T-bills and keep studying to Invest in RE. I bought T-bills this month at 5.23%. Your Credit Score is 756? I don't think that is enough, but, the first thing is to go to your Banker and try to get qualified for a Loan. Do not tell your Banker you want to "Invest" or do BRRR's. You need to study the IRS rule on First Time Home Buyer's. You can Homestead your First Home for 2 out of 5 years and Sell it for up to $250,000 Tax-free profit. That is the safest and easiest way to start in RE. As you live in your Home you find another fixer-upper to Rent until you Sell your First Home and just "rinse and repeat" for the rest of your life. All the City, State and Federal Tax and Down Payment advantages are with First Time Home Buyers. Real Estate Investing does not have to be the only thing in your Portfolio. No one talks about 5 or 10 year Plans to make a Million in RE. Usually that means making $3,000 a Month in free Cash Flow many years in the future with a lot of Work. I did that a couple times in my 35 years with RE. You can learn to Google Search for these types of Plans. Learn how to use Zillow Searches and keep up with Daily Searches for all kinds of properties. Learn how to use Google Map and Street View to home in on the overhead and street views of the property and neighborhood, so, you don't have to drive out there to see a heartbreak house with bad neighbors that you thought you could afford, but, it is in a War Zone. In the last 35 years I have been to 100 Get Rich Quick seminars like you can find on Youtube videos and only a few times have they given the Newbie's the warning to, "never take the advice from someone who is not a Millionaire."

    1Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y
    Quote from @Ricardo Hidalgo:
    Quote from @V.G Jason:
    Quote from @Ricardo Hidalgo:
    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. 

     Did you do it in 2020-2022? If so, that has very little merit. There's miserable fix & flips that came out heavily in the green.


    Beginning of 2022 until now and made 6 figure profits this year regardless of market. I would say the portfolio I am guiding and managing with clients is over 20 million with most of the acquisitions made in the last 3-6 months. We have seen a 20-25% return on the money since then. 


     Sounds about right. If you bot H1 22, it's more luck than skill. Think what you want, see how you fair over 5-10 years.

    0Reply
  • Ricardo Hidalgo
    Real Estate Agent · Member since 2019 · 569 posts · 257 votes
    2y
    Quote from @V.G Jason:
    Quote from @Ricardo Hidalgo:
    Quote from @V.G Jason:
    Quote from @Ricardo Hidalgo:
    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. 

     Did you do it in 2020-2022? If so, that has very little merit. There's miserable fix & flips that came out heavily in the green.


    Beginning of 2022 until now and made 6 figure profits this year regardless of market. I would say the portfolio I am guiding and managing with clients is over 20 million with most of the acquisitions made in the last 3-6 months. We have seen a 20-25% return on the money since then. 


     Sounds about right. If you bot H1 22, it's more luck than skill. Think what you want, see how you fair over 5-10 years.


     Lol ok. I've owned 2.8 million in real estate and over 110 million in sales in 5 years. I would say I have the experience, market knowledge and team to do this efficiently. But I appreciate your comment and perhaps you can show me your numbers. 

    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y
    Quote from @Ricardo Hidalgo:
    Quote from @V.G Jason:
    Quote from @Ricardo Hidalgo:
    Quote from @V.G Jason:
    Quote from @Ricardo Hidalgo:
    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. 

     Did you do it in 2020-2022? If so, that has very little merit. There's miserable fix & flips that came out heavily in the green.


    Beginning of 2022 until now and made 6 figure profits this year regardless of market. I would say the portfolio I am guiding and managing with clients is over 20 million with most of the acquisitions made in the last 3-6 months. We have seen a 20-25% return on the money since then. 


     Sounds about right. If you bot H1 22, it's more luck than skill. Think what you want, see how you fair over 5-10 years.


     Lol ok. I've owned 2.8 million in real estate and over 110 million in sales in 5 years. I would say I have the experience, market knowledge and team to do this efficiently. But I appreciate your comment and perhaps you can show me your numbers. 

    You've been in it for how long again? The numbers mean very little when it's the best two years.

    I started REI in 2023, I've bought just about 40 houses now. If we want to compare careers, I really would not get into that if I was you nor will I engage.  Just relax when someone points out facts, you transacted at an excellent time, there's nothing wrong or bad about that.

    Again, just see how it averages it out over 5-10 years. That's a better sample size.
    0Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 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 think it may be worth to use that 150k as multiple DP and have 2 properties. you can do that in Cincinnati with that #. Or one SMF in a great area that will do very well over time. YOu have many options, as I am sure you know

    [email protected]859-443-4952
    Sam McCormack Realtor
    View Page
    0Reply
  • David Cianci
    Investor · Harrisonburg Virginia · Member since 2023 · 40 posts · 23 votes
    2y
    Quote from @Account Closed:
    Quote from @David Cianci:
    Quote from @Account Closed:
    Quote from @Jeff Hines:

    Hey everyone,

    Appreciate your insight Ken, thank you!

    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!

    It depends on what your goal is. If you want to make a career of investing you get "one on one" training that is comprehensive, like at

    How I Made Millions Investing In Real Estate

    https://www.biggerpockets.com/forums/311/topics/1146250-how-...
    that should be in the $15k to $20K range and guarantee you'll buy properties or your money back.

    Or, if you want to learn basics and "dabble"

    There is a "community" that runs about $8k to $10K that says they have online videos and other community members to answer your questions. I fail to see how that is any different than Bigger Pockets but people talk about it.

    There is a very large group that charges $20k to join and has a lot of videos and meet ups and is run kind of like an MLM where they give you a "discount" "to the next level" if you convince someone else to join. That to me isn't investing, it's something else, but some people fall for it.

    But, if you are just starting out and building your capital, 

    There are good REIAS (NationalREIA.org) where you can join an investor group in your area. Ours. locally runs $20 a month. If an investment group charges a lot of money, they are charging to join, not to teach. If you are new, you want the teaching type.

    You can hire individual specialists in asset protection, legal documents, estate planning, and so on, but my belief is that it's better to get that in a training program focused on real estate investing by investors.  And of course, plenty of opportunities on Bigger Pockets. Lots of options. it depends on your goals.


    0Reply
  • Jordan RayBusiness Member
    Real Estate Agent · Memphis, TN · Member since 2023 · 642 posts · 336 votes
    2y

    If I were you, I would start using the BRRRR method. You have plenty of capital to learn & succeed and learn from your mistakes.

    [email protected]662-642-1458
    Jordan Ray - eXp Realty5112 Reviews
    WebsiteView Page
    0Reply
  • Peter W.
    Member since 2020 · 351 posts · 329 votes
    2y

    Buy a house that needs cosmetic work, kitchen, bath, flooring, paint, lights etc and fix it up yourself while living in it for a year. Make sure it has good electrical and good structural. Now you know if you like working on houses. I don't know which areas are good but you are trying for a 300k house after repair which you can purchase in the 200k range. Given your income level you might be shooting for 225k house with a 150k purchase price. You should be about 50k out of pocket—10k downpayment, 10k closing costs, and about 30k for materials and slight amount of labor (but you are doing most of it yourself). If you liked the working on houses repeat and rent out the original house (and learn if you like being a landlord). If you don't like fixing houses, REI probably isn't your game if you are making 40k a year. Spend the other 100k with 20k in msft, 20k in google, 40k in s&p 500 and 20k in treasury bills as an emergency fund. If you never touch that money it should be enough for you to retire on at 65 or so. Transfer it into a Roth IRA 6.5k as you are able (IRS contribution limits will make this take a while). The search is going to be hard because if you are buying in the right area everyone is going to be looking for this.

    0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ 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!

    Hey Jeff, totally can relate with you being from an expensive real estate market - I moved to Columbus a few years ago (from Portland, Oregon which was super expensive) to become a full time real estate investor, and ever since, I've completed quite a lot of BRRRRs, flips, and own a successful rental portfolio here in Columbus Ohio. There's so many catalysts for population and job growth (Intel, Honda, Amazon, Nationwide Hospital, etc). I can definitely tell you there's still a lot of positive cash flowing and 1% rule deals and you get amazing appreciation. As an investor and agent here in Columbus Ohio, if you have any questions or want to connect, definitely reach out!
    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9121 Reviews
    WebsiteView Page
    0Reply
  • Heidi Nelson
    Residential Real Estate Broker · Morgan Hill, CA · Member since 2015 · 8 posts · 2 votes
    2y

    @James Wise

    Thank you for the guide. Very good information.

    1Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    2y
    Quote from @Heidi Nelson:

    @James Wise

    Thank you for the guide. Very good information.


     Anytime...

    0Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    2y

    @Jeff Hines
    Get started with a househack. 

    [email protected]614-412-4565
    Reafco-556 Reviews
    View Page
    1Reply
  • Michael Margarella
    Investor · New York City · Member since 2020 · 164 posts · 75 votes
    2y

    Go bigger now! It sounds like you have a solid base and it’ll take you a similar amount of time to close and manage a larger deal.

    We pivoted to self-storage a few years ago. We like self-storage because even if there is a recession, and people downsize, those people will have a need for self-storage, as evidenced by storage occupancy rates during past recessions. And during inflationary times, our rental rates increase. We're also able to evaluate our rates, and keep pace with inflation, on a monthly and quarterly basis because of shorter term leases.

    Now we syndicate larger self-storage deals and work with passive investors.

    0Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ 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!



    The strategy that I recommend is going to differ from the responses that I see at the time I'm writing my response.

    1. Since you have no experience- network and find the most active fix and flip investors in Charlotte, Raleigh or Greensboro.  Become a very small private investor in one of their projects. Your objective- Learn, learn, learn.   You can invest passively but your real goal should be to learn as much as possible. You may even want to arrange it in such a way that it's a JV between you and that investor

    2. Get approved for a loan from either an HML or Private Money person- Why would they lend to you?  Because for the most part, these lenders look at the deal you bring to the table, the hard asset.  You will also be able to show you have good cash reserves, good credit, a W2 (they don't care about job gaps) and you were part of a successful Joint Venture with an experienced fix-and-flip investor.  

    3. Once approved set a goal- Let's say 4 fix & flips that net you $25K each; $100K; now you have a downpayment for one or more buy and holds.  By the way- You may also decide not to sell the properties but refinance and rent. 

    My advice - use your cash to learn how to joint-venture on a deal with someone who has experience. While learning the ins and outs of how to evaluate and fix/renovate a property. Then turn your profits into assets that provide monthly cash flow.




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    3Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    2y
    Quote from @Jeff Hines:
    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? 

     I partnered with an old college roommate and we split the 6% down payment

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    0Reply
  • River SavaPro Member
    Lender · USA · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    Hey Jeff, I would love to connect with you to discuss this further. I am in CLT so let me know!

    [email protected]
    2Reply
  • Jim K.
    Rental Property Investor · Charlotte, NC · Member since 2017 · 271 posts · 259 votes
    2y

    RE is a fantastic investment once you know what you're doing. 


    More importantly, figure out how to significantly increase active income. That will have the largest return by far.

    Also, Charlotte is a great market. You can look at the towns that surround Charlotte and find deals that make sense when the time is right for you. I would not recommend starting out of state since you live in one of the top markets to invest in. 

    1Reply
  • Jordan RayBusiness Member
    Real Estate Agent · Memphis, TN · Member since 2023 · 642 posts · 336 votes
    2y
    Quote from @Jim K.:

    RE is a fantastic investment once you know what you're doing. 


    More importantly, figure out how to significantly increase active income. That will have the largest return by far.

    Also, Charlotte is a great market. You can look at the towns that surround Charlotte and find deals that make sense when the time is right for you. I would not recommend starting out of state since you live in one of the top markets to invest in. 

    Not true, investing out-of-state can be very rewarding especially if you invest in an affordable market like Memphis, TN with a trusted investor agent. I am always assisting out-of-state agents in purchasing their rentals/flips & since I am a REALTOR, I have a legal duty to my investor clients to get the most of their investment. I have the investor eye since I invest myself. I have evaluated hundreds of deals, & have previous experience as a real estate wholesaler in Memphis.

    I hope you take the information that has been givin to you & on BiggerPockets to see what strategy works for you. Don't work alone as a beginner though as that can be challenging. If you do chose to work alone however, I do recommend you join your local REIA (Real Estate Investor Association). In Memphis I am apart of the Memphis REIA which is known as MIG or Memphis Investor Group and this has been vital to my knowledge & choices as an investor.

    Goodluck!

    [email protected]662-642-1458
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    2Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 656 votes
    2y

    So with 150k and good credit you are already starting a step above most.  The question is what to do with it.

    I'm a firm believe in starting small.  There's lots of nice markets from Western PA to Indianapolis.  These markets will offer you distressed properties starting at 60kish or so and up to 150kish.

    For example, let me make up a hypothetical deal.

    You buy a house for 90k and am putting 60k in to add. half bath, redo the kitchen and bathroom, brand new paint and new LVP flooring all throughout. The ARV given to you by your agent is 215k.

    So first you'd enter a bridge loan and get 85% maybe 90% of the purchase( 90k) and 100% of the rehab in a loan.  So your loan amount would be about 135k lets say to use round numbers.  You will have sunk about 14k plus closing costs into the deal.

    In a few months the work is done and you get a PM to find you a tenant and get a lease and collect first month and security and now you can do a 75% cash out on that 215k.  That's about 161,250.  You pay off the 135k loan and take back your 14k plus closing and holding costs - 20k and you are left with about 6k that is cash in your pocket.

    So now you are +6k, and you have a renter in there paying your mortgage and putting a couple hundred per month in your pocket and you used 0 of the 150k to do it, or I should say you left 0 in the project.

    You wanna create a funnel, an environment where you can get 3x - 5x of these done every year, and if you holding look for the 2 - 4s buildings. They cashflow way better than a SFH.

    I create funnels for my clients all the time, I have them burn and churn the SFH and get some short term money coming in while we look for the good cash flowing 2 - 4 unit buildings to hold.

    Get a system, get a plan, create environments bubbling with opportunity.  

    3Reply
  • Julien J.
    Investor · CO · Member since 2016 · 757 posts · 1k+ votes
    2y

    @Jeff Hines

    I'd house hack a duplex to a fourplex. That's how I started and was a phenomenal foundation for the rest of my portfolio.

    3Reply
  • Pat LulewiczBusiness Member
    Realtor · Raleigh NC and Greensboro, NC · Member since 2019 · 396 posts · 392 votes
    2y

    DSCR loans can get you approved for a rental loan or a flip loan (alternatively make it a BRRR if it works) based on liquidity and credit score; less so important if you have a job or the work history.

    You can also consider being a private lender if you're trying to wait until you can get the necessary work history for other forms of financing. 

    You can definitely buy good homes that need a rehab for cash with $150,000 in NC. Just bought a $60k home that we'll put $50k into and have an almost perfect BRRR.

    How much are you looking to make to "supplement working full time" and then work backwards. Also consider tax implications of rentals w/ depreciation vs your FT job with normal W2 taxes.

    2Reply
  • Jeff Hines
    OP
    Member since 2023 · 9 posts · 22 votes
    2y
    Quote from @Pat Lulewicz:

    DSCR loans can get you approved for a rental loan or a flip loan (alternatively make it a BRRR if it works) based on liquidity and credit score; less so important if you have a job or the work history.

    You can also consider being a private lender if you're trying to wait until you can get the necessary work history for other forms of financing. 

    You can definitely buy good homes that need a rehab for cash with $150,000 in NC. Just bought a $60k home that we'll put $50k into and have an almost perfect BRRR.

    How much are you looking to make to "supplement working full time" and then work backwards. Also consider tax implications of rentals w/ depreciation vs your FT job with normal W2 taxes.


     Where did you purchase the home for $60k? 

    1Reply
  • Pat LulewiczBusiness Member
    Realtor · Raleigh NC and Greensboro, NC · Member since 2019 · 396 posts · 392 votes
    2y
    Quote from @Jeff Hines:
    Quote from @Pat Lulewicz:

    DSCR loans can get you approved for a rental loan or a flip loan (alternatively make it a BRRR if it works) based on liquidity and credit score; less so important if you have a job or the work history.

    You can also consider being a private lender if you're trying to wait until you can get the necessary work history for other forms of financing. 

    You can definitely buy good homes that need a rehab for cash with $150,000 in NC. Just bought a $60k home that we'll put $50k into and have an almost perfect BRRR.

    How much are you looking to make to "supplement working full time" and then work backwards. Also consider tax implications of rentals w/ depreciation vs your FT job with normal W2 taxes.


     Where did you purchase the home for $60k? 


     High Point. You can get similar properties in Winston. Greensboro usually is more expensive, but that's not to say it doesn't happen. Just much more rare than even 2 years ago.

    2Reply
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