How would you use 300k to start investing in real estate?
Fort Lauderdale, FL · Member since 2023 · 12 posts · 12 votes
How would you use 300k to start investing in real estate?
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesI am going to be the voice of caution on section 8.. especially low value low priced section 8.. those are in the roughest neighborhoods in America.. there is very little change of appreciation unless rents rocket up and section 8 is pretty stable. also your tenant base is very tough on the homes so your going to have far more annual maintenance on these than buying a much better class of property. Every city has section 8. some of my clients specialize in it in Baltimore and those rates are some of the highest in the US and rent to price ratio is very high.. If your going to go into sectin 8 investing it has to be for the long term and you have to continue to grow it. Just owning few is not going to do much for you.. your better off buying in much better locations of the city or in areas that you have a very good idea your going to see appreciation.. U want to buy where you have two exits ONE to a landlord and TWO to a home owner.. if your buying 50k section 8s there are NO homeowners and if you have a bad experience which many do you have zero exit your will be selling to guys like Bob who are pro's are will low ball you or wholesalers.. CAUTION
70 Replies
- 2yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
you just listed some very different strategies - STR is very different from being a lender, which is very different from LTR section 8.
it's going to come down to your goals - if you want to be a hospitality operator, go STR. if you want to be a lender, that's great too, but i think that one is an exceptionally high risk strategy for a new investor, and i would think you'd want to spend a couple years getting to know your market and other investors. sometimes it gets recommended to new investors with a lot of capital - and that is totally insane. that one isn't a beginner strategy.
so - what do you want to do?
Quote from @Sabrina Dagostino:
Hi everyone!
I am a 24-year-old business owner in FL and I've been looking to get started with investing for two years now. I have around 300k saved for real estate investment purposes. I've learned SO much from reading BP forums, attending boot camps and also personal research, but am still feeling a bit stuck on where to start. For a while, my plan was STRs in the South Florida market, but I've recently taken a huge interest in section 8 investing and have been learning a lot about it. I'm thinking of starting with conventional loans to secure 20% down payments and then eventually shifting to hard money lending. To the seasoned investors out there, what would your first move be if you were in my shoes? Thoughts on starting out with section 8? Super thankful for any and all advice. Thank you (:
with 300k you can buy 3 SF with 1100 -1400 in rent, refi cash out, do again. FL is way overpriced; I will not touch it. Correction is coming, especially in our area
All the best
- Fort Lauderdale, FL · Member since 2023 · 12 posts · 12 votes2y
@Nicholas L. Thanks for your reply!
Yes, very different! I'm not interested in being a lender, though. I worded that incorrectly, conventional/hard $ are the options I'm considering for funding my deals. I've gone back and forth about what I want to get started with (STR, LTR, F&F), but after moving to FL, touring available properties, and learning more about the Airbnb/short-term rental market here, I don't think STR is the move for me right now. Section 8 LTR is what I'm most excited about so that's likely my first move. But again, super open to advice and appreciate it!
- Real Estate Agent · Memphis, TN · Member since 2019 · 365 posts · 264 votes2y
@Sabrina Dagostino welcome to the forums and congrats on the first post! If you're wanting to go the section 8 route I'd definitely advise pairing up with someone that has a lot of experience with those types of investments because there are several rules/stipulations that have to be followed in order to get paid. Personally I wouldn't use leveraged money and invest all of it in section 8 simply because it's more of a roller coaster of a ride. I'd advise getting a couple in more owner occupied areas because it's more consistent and a safer investment. That said Memphis is a great market for any and all of that so feel free to reach out if any questions arise. Best of luck!
- Fort Lauderdale, FL · Member since 2023 · 12 posts · 12 votes2y
Quote from @Bob S.:
Quote from @Sabrina Dagostino:
Hi everyone!
I am a 24-year-old business owner in FL and I've been looking to get started with investing for two years now. I have around 300k saved for real estate investment purposes. I've learned SO much from reading BP forums, attending boot camps and also personal research, but am still feeling a bit stuck on where to start. For a while, my plan was STRs in the South Florida market, but I've recently taken a huge interest in section 8 investing and have been learning a lot about it. I'm thinking of starting with conventional loans to secure 20% down payments and then eventually shifting to hard money lending. To the seasoned investors out there, what would your first move be if you were in my shoes? Thoughts on starting out with section 8? Super thankful for any and all advice. Thank you (:
with 300k you can buy 3 SF with 1100 -1400 in rent, refi cash out, do again. FL is way overpriced; I will not touch it. Correction is coming, especially in our area
All the best
I agree! I'm leaning towards out-of-state investing, FL market is super expensive, especially where I'm located.
- Fort Lauderdale, FL · Member since 2023 · 12 posts · 12 votes2y
Quote from @Taz Zettergren:
@Sabrina Dagostino welcome to the forums and congrats on the first post! If you're wanting to go the section 8 route I'd definitely advise pairing up with someone that has a lot of experience with those types of investments because there are several rules/stipulations that have to be followed in order to get paid. Personally I wouldn't use leveraged money and invest all of it in section 8 simply because it's more of a roller coaster of a ride. I'd advise getting a couple in more owner occupied areas because it's more consistent and a safer investment. That said Memphis is a great market for any and all of that so feel free to reach out if any questions arise. Best of luck!
Thank you, Taz! Super helpful. I've heard Memphis is a great area for S8 investing so I'll definitely reach out if I decide to look there!
Quote from @Sabrina Dagostino:
Quote from @Bob S.:
Quote from @Sabrina Dagostino:
Hi everyone!
I am a 24-year-old business owner in FL and I've been looking to get started with investing for two years now. I have around 300k saved for real estate investment purposes. I've learned SO much from reading BP forums, attending boot camps and also personal research, but am still feeling a bit stuck on where to start. For a while, my plan was STRs in the South Florida market, but I've recently taken a huge interest in section 8 investing and have been learning a lot about it. I'm thinking of starting with conventional loans to secure 20% down payments and then eventually shifting to hard money lending. To the seasoned investors out there, what would your first move be if you were in my shoes? Thoughts on starting out with section 8? Super thankful for any and all advice. Thank you (:
with 300k you can buy 3 SF with 1100 -1400 in rent, refi cash out, do again. FL is way overpriced; I will not touch it. Correction is coming, especially in our area
All the best
I agree! I'm leaning towards out-of-state investing, FL market is super expensive, especially where I'm located.
I know, I live on the beach in Boynton, crazy overpriced. I do all my biz in Cleveland. I just got 875 for a 2 br house all in 50k and 800 for a 2 br in one of my buildings, whoop whoop LOL
All the best
- 2yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
Got it. Well, cash flow is tough right now due to where interest rates are. I would strongly encourage you to find a "local" market to start in even if that is 1 or 2 or 3 hours away. Go to all of the REIA meetings, meet all of the local investors, and tour 50 properties in person before you rule anything out.
Yes, it's perfectly possible to invest remotely, but you need a strong team and a great network. It is NOT possible to buy a random MLS property in Iowa and sit back and net $300 a month.
@Bob S. has a great team and a great network and has done hundreds of deals =)
- Fort Lauderdale, FL · Member since 2023 · 12 posts · 12 votes2y
@Nicholas L. Thank you! I appreciate the support and advice.
@Bob S. Ironically, Cleveland is one of the top 2 out-of-state markets I've been looking into. I've also heard it's a great market for Section 8.
- Property Manager · Orlando, FL · Member since 2023 · 109 posts · 64 votes2y
@Sabrina Dagostino There are still some Florida markets that are still good investments if you are appreciation focused, such as Palm Bay and Ocala, where you can buy new builds for $250-300k and rents will be between $1600-$2200, depending on area. Both of those areas have seen 130%+ appreciation in the last 8 years. Now, they are starting to get a little saturated, but you have some nice built in equity once you close. But I generally agree, it is getting tougher to invest in Florida and cashflow if you don't already own the property.
As for Section 8, I don't have any personal experience with it, but I do know a couple investors who do Section 8 rentals. Like Taz said, it can be more of a roller coaster LOL. The guaranteed money is nice, and there are a lot of tenants who are good tenants and appreciate the assistance. There is also a higher risk of getting a bad tenant (IMO) and I have seen some pretty destroyed properties from Section 8 tenants (more so than non-Section 8).
Quote from @Sabrina Dagostino:
@Nicholas L. Thank you! I appreciate the support and advice.
@Bob S. Ironically, Cleveland is one of the top 2 out-of-state markets I've been looking into. I've also heard it's a great market for Section 8.
Well you missed the boat for the super high caps, 25- 30% nets, but 10% is still aval. I deal with CMHA and other govt programs weekly, there great. I am going to get not less the 900/900 for a duplex, all in 70k, another WHOOP WHOOP LOL,
All the best
Quote from @Chris Rich:
@Sabrina Dagostino There are still some Florida markets that are still good investments if you are appreciation focused, such as Palm Bay and Ocala, where you can buy new builds for $250-300k and rents will be between $1600-$2200, depending on area. Both of those areas have seen 130%+ appreciation in the last 8 years. Now, they are starting to get a little saturated, but you have some nice built in equity once you close. But I generally agree, it is getting tougher to invest in Florida and cashflow if you don't already own the property.
As for Section 8, I don't have any personal experience with it, but I do know a couple investors who do Section 8 rentals. Like Taz said, it can be more of a roller coaster LOL. The guaranteed money is nice, and there are a lot of tenants who are good tenants and appreciate the assistance. There is also a higher risk of getting a bad tenant (IMO) and I have seen some pretty destroyed properties from Section 8 tenants (more so than non-Section 8).
Its ALL about screening. I have had govt program tenants for years and years. Most keep the prop better than some of my cash tenants,
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
I am going to be the voice of caution on section 8.. especially low value low priced section 8.. those are in the roughest neighborhoods in America.. there is very little change of appreciation unless rents rocket up and section 8 is pretty stable. also your tenant base is very tough on the homes so your going to have far more annual maintenance on these than buying a much better class of property. Every city has section 8. some of my clients specialize in it in Baltimore and those rates are some of the highest in the US and rent to price ratio is very high.. If your going to go into sectin 8 investing it has to be for the long term and you have to continue to grow it. Just owning few is not going to do much for you.. your better off buying in much better locations of the city or in areas that you have a very good idea your going to see appreciation.. U want to buy where you have two exits ONE to a landlord and TWO to a home owner.. if your buying 50k section 8s there are NO homeowners and if you have a bad experience which many do you have zero exit your will be selling to guys like Bob who are pro's are will low ball you or wholesalers.. CAUTION
- Property Manager · Orlando, FL · Member since 2023 · 109 posts · 64 votes2y
Quote from @Bob S.:
Quote from @Chris Rich:
@Sabrina Dagostino There are still some Florida markets that are still good investments if you are appreciation focused, such as Palm Bay and Ocala, where you can buy new builds for $250-300k and rents will be between $1600-$2200, depending on area. Both of those areas have seen 130%+ appreciation in the last 8 years. Now, they are starting to get a little saturated, but you have some nice built in equity once you close. But I generally agree, it is getting tougher to invest in Florida and cashflow if you don't already own the property.
As for Section 8, I don't have any personal experience with it, but I do know a couple investors who do Section 8 rentals. Like Taz said, it can be more of a roller coaster LOL. The guaranteed money is nice, and there are a lot of tenants who are good tenants and appreciate the assistance. There is also a higher risk of getting a bad tenant (IMO) and I have seen some pretty destroyed properties from Section 8 tenants (more so than non-Section 8).
Its ALL about screening. I have had govt program tenants for years and years. Most keep the prop better than some of my cash tenants,
I agree, screening is critical with all tenants. What's your ratio of Section 8 to cash tenants?
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
PS all these Cities that are talked about Memphis Cleveland etc I have been doing deals for BRRR investors for over 20 years ( lending) there are great parts of the citys you dont need to buy in the worst neighborhoods trying to get the highest paper returns.. you will regret it.
Quote from @Chris Rich:
Quote from @Bob S.:
Quote from @Chris Rich:
@Sabrina Dagostino There are still some Florida markets that are still good investments if you are appreciation focused, such as Palm Bay and Ocala, where you can buy new builds for $250-300k and rents will be between $1600-$2200, depending on area. Both of those areas have seen 130%+ appreciation in the last 8 years. Now, they are starting to get a little saturated, but you have some nice built in equity once you close. But I generally agree, it is getting tougher to invest in Florida and cashflow if you don't already own the property.
As for Section 8, I don't have any personal experience with it, but I do know a couple investors who do Section 8 rentals. Like Taz said, it can be more of a roller coaster LOL. The guaranteed money is nice, and there are a lot of tenants who are good tenants and appreciate the assistance. There is also a higher risk of getting a bad tenant (IMO) and I have seen some pretty destroyed properties from Section 8 tenants (more so than non-Section 8).
Its ALL about screening. I have had govt program tenants for years and years. Most keep the prop better than some of my cash tenants,
I agree, screening is critical with all tenants. What's your ratio of Section 8 to cash tenants?
I would think we have about 60% section 8 and other government programs
Quote from @Jay Hinrichs:
PS all these Cities that are talked about Memphis Cleveland etc I have been doing deals for BRRR investors for over 20 years ( lending) there are great parts of the citys you dont need to buy in the worst neighborhoods trying to get the highest paper returns.. you will regret it.
Have you seen what's going on in East Clev? We are buying everything we can in certain parts. There is simply zero inventory for a reason. :) I did get fortunate enough to get a 7 unit two months ago, still have the 81 unit we got 7 years ago for a bargain :). I bet there are 100s of investors that wish they bought there and held. Just like the ones that said we were crazy to be buying in GH, MH ,WH, Lee Harvard, 7, 8 9 years ago all those investors are kicking themselves. Heck, I wish I held about 50 more of the ones I flipped, HUGE mistake, cost me millions. I would be hanging with you instead of doing this crap LOL
Keep crushing it Jay, or are you finally touring the world :)
All the best
- Fort Lauderdale, FL · Member since 2023 · 12 posts · 12 votes2y
Quote from @Chris Rich:
@Sabrina Dagostino There are still some Florida markets that are still good investments if you are appreciation focused, such as Palm Bay and Ocala, where you can buy new builds for $250-300k and rents will be between $1600-$2200, depending on area. Both of those areas have seen 130%+ appreciation in the last 8 years. Now, they are starting to get a little saturated, but you have some nice built in equity once you close. But I generally agree, it is getting tougher to invest in Florida and cashflow if you don't already own the property.
As for Section 8, I don't have any personal experience with it, but I do know a couple investors who do Section 8 rentals. Like Taz said, it can be more of a roller coaster LOL. The guaranteed money is nice, and there are a lot of tenants who are good tenants and appreciate the assistance. There is also a higher risk of getting a bad tenant (IMO) and I have seen some pretty destroyed properties from Section 8 tenants (more so than non-Section 8).
Hi Chris! I haven't looked into Palm Bay or Ocala yet but that's very interesting and good to know! I definitely see myself investing in FL one day but since I'm just starting out, I'm thinking of avoiding it for now, lol!
- Fort Lauderdale, FL · Member since 2023 · 12 posts · 12 votes2y
Quote from @Bob S.:
Quote from @Chris Rich:
@Sabrina Dagostino There are still some Florida markets that are still good investments if you are appreciation focused, such as Palm Bay and Ocala, where you can buy new builds for $250-300k and rents will be between $1600-$2200, depending on area. Both of those areas have seen 130%+ appreciation in the last 8 years. Now, they are starting to get a little saturated, but you have some nice built in equity once you close. But I generally agree, it is getting tougher to invest in Florida and cashflow if you don't already own the property.
As for Section 8, I don't have any personal experience with it, but I do know a couple investors who do Section 8 rentals. Like Taz said, it can be more of a roller coaster LOL. The guaranteed money is nice, and there are a lot of tenants who are good tenants and appreciate the assistance. There is also a higher risk of getting a bad tenant (IMO) and I have seen some pretty destroyed properties from Section 8 tenants (more so than non-Section 8).
Its ALL about screening. I have had govt program tenants for years and years. Most keep the prop better than some of my cash tenants,
@Bob S. For sure, I've been learning that screening is the most important step. I appreciate all of your advice and help so far in this thread! It sounds like you have a great network of people, since I'm highly considering investing in Cleveland, I'd love to connect!
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bob S.:
Quote from @Jay Hinrichs:
PS all these Cities that are talked about Memphis Cleveland etc I have been doing deals for BRRR investors for over 20 years ( lending) there are great parts of the citys you dont need to buy in the worst neighborhoods trying to get the highest paper returns.. you will regret it.
Have you seen what's going on in East Clev? We are buying everything we can in certain parts. There is simply zero inventory for a reason. :) I did get fortunate enough to get a 7 unit two months ago, still have the 81 unit we got 7 years ago for a bargain :). I bet there are 100s of investors that wish they bought there and held. Just like the ones that said we were crazy to be buying in GH, MH ,WH, Lee Harvard, 7, 8 9 years ago all those investors are kicking themselves. Heck, I wish I held about 50 more of the ones I flipped, HUGE mistake, cost me millions. I would be hanging with you instead of doing this crap LOL
Keep crushing it Jay, or are you finally touring the world :)
All the best
ya i just got back from Portugal trying to locate Clayton Morris and his wife No luck though
I get what your saying and thats why i mentioned if your going into path of progress ( which has treated me very well over the years) its all about growing scale.. Although Section 8 for me personally and i owned over 300 sFRs at one time 95% section 8 simply was not the best use of my time and funding capacity.. So I sold out.. the drama with those folks .. the risks of working in those areas just did not equal risk reward for me personally. its my personal opinion investors starting out or with modest portfolios would be better off in asset class's that are not to management intensive and have a REALISTIC expectation that they can be put on MLS and sold to not only an investor but a homeowner.. Even the stuff I did in South Chicago when rates were low we were selling those 2 and 3 flats to FHA buyers for 100k a door.. but man working there TOUGHJust like my current clients in Cleveland that are buying West side and doing very well .. Just safer investment in my mind for out of state folks
- Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes2y
Hey, what is your current living situation? Congrats on saving so much $! May I suggest a house hack? Buy a 3 or 4 unit or 100 unit multi family. Live in 1 unit, rent out the rest! Rinse and repeat.
- Fort Lauderdale, FL · Member since 2023 · 12 posts · 12 votes2y
Quote from @Bud Gaffney:
Hey, what is your current living situation? Congrats on saving so much $! May I suggest a house hack? Buy a 3 or 4 unit or 100 unit multi family. Live in 1 unit, rent out the rest! Rinse and repeat.
Thank you, I appreciate it! I'm currently renting, in a 14-month lease that just started recently, but I have thought about house hacking in the past
- Property Manager · Orlando, FL · Member since 2023 · 109 posts · 64 votes2yHouse hacking may be a really good idea, especially if you buy in a good area with strong appreciation. Cash flow is nice, but appreciation is where I personally see the real value. In January my wife and I decided we wanted to make the leap and acquire a new house, either as an investment or as a new primary and rent our old primary. Looking at the Florida housing market, and the appreciation of the last decade, its been 5-8% every year, with 2021 & 2022 seeing 20%+ appreciation. We decided it was better to use the money to buy the $450,000 new primary than a $250,000 rental, and then transitioned the primary to a rental because 5% appreciation on $450k is more than $250k.
Quote from @Sabrina Dagostino:
Quote from @Bud Gaffney:
Hey, what is your current living situation? Congrats on saving so much $! May I suggest a house hack? Buy a 3 or 4 unit or 100 unit multi family. Live in 1 unit, rent out the rest! Rinse and repeat.
Thank you, I appreciate it! I'm currently renting, in a 14-month lease that just started recently, but I have thought about house hacking in the past
I know a lot of people think the Florida market is "over-priced," and it is to some degree, but it's relative. I recently read a BP article where they talked about that concept and the value of a house is what someone is willing to pay for it... and people are still paying these prices. We've already seen the market correct itself from the linear value increase of 2020-2022, and houses never really "fell" like a lot of people said it would. Could values go down more? Sure. But is it likely? I don't think so, and neither do most of the experts. Florida, depending on your source, is #1-3 in inbound migration, has 5 of the top 10 cities in the country for migration, #1-3 in economy and job growth. There is a lot of pent up buyer demand. If interest rates start falling, and inventory doesn't see a surplus, I think you will see a hot summer of people buying and driving the values up.
But in hindsight, the best thing we ever did was buy the first house back in 2017. That gave us the ability to gain a ton of equity and leverage into another property. I think the key is to just enter the market, one way or another, and go from there.
Good luck with whichever route you go! - Cleveland, OH · Member since 2022 · 826 posts · 578 votes2y
Sabrina,
Start with a house hack! You will retain much of your capital and learn how to manage rentals on-site. You'll have tenants covering most of your expenses and the rest will be "payment" for your hands on education.
Best of luck with whatever you decide to do.
- 2yJohn WilliamsBusiness MemberProperty Manager · Clarksville, TN · Member since 2018 · 443 posts · 210 votes
Buy 4-5 houses in a great market like Clarksville, TN! (where cash flow meets appreciation)
Rent My Home - Property Management4.8217 Reviews
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