I'm stuck, help me out please

I'm stuck, help me out please

Ambler, PA · Member since 2017 · 19 posts · 6 votes

Hello,


I am just starting out and I'm stuck.  I am in the pay off all debts (to increase my debt to income ratio) phase while also trying to save up money to start.  The only issue is based on my research once I pay off most of my debts and save up some money I'm not sure where to start.


Since I'm not able to save up $10K plus to buy a rental I am looking at for alternative investment strategies to help build up my initial investment (ideally $30K-$40K).  The only issue is every one I've seen that match seem to not be worth it.


The top 2 options look like land investing or whole selling.  But land investing looks to have a very low demand meaning hard to sell or requiring a large initial investment.  And whole selling has a 98% failure rate due to several issues.


Am I new and wrong on these or are their any other strategies people recommend to someone starting out in this with not a whole lot of investing capital .

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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y

Don't pay off all of your debt. Every time I do that my Credit Score drops...100 points last time....

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    2y

    Don't pay off all of your debt. Every time I do that my Credit Score drops...100 points last time....

  • Realtor · Member since 2023 · 18 posts · 6 votes
    2y

    Two options that might work well for you:

    1. Wholesaling as you mentioned. All you really need is to learn more about the approach and then dust off your marketing skills!

    2. Passive real estate investment. Rather than pay off your debts, you could take your initial seed money to invest with a rate of return.

    The big thing right now is just understanding and ensuring your rate of return on any investment you do with the cash on hand is higher than the interest rate of what you are paying off.

  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    2y

    @Eric Sulek Pay off high interest debt like credit cards (and then don’t use them unless you can pay them off entirely each month), car loans, payday loans, things like that. Don’t pay off mortgages or student loans before beginning your real estate journey.

  • Investor · Fort Lauderdale, FL · Member since 2013 · 917 posts · 607 votes
    2y

    Eric, the usual advice given to n00bs is that wholesaling is the path to follow. It may be for some, but the YouTube and TikTok get-rich-quick gurus can lay it on pretty thick with their $30K In 30 Days sales pitches.  An investor friend down my way does very well with his wholesaling business to the tune of $400K - $500K/yr.  But to find his deals he markets to the tune of $30K monthly!
    From my personal experience I suggest you take a look at lease options, specifically lease option assignments.  While nothing in this business is easy, this strategy is certainly easier than wholesaling.  If you know what you're doing they are risk free and most deals are done with little to no cash out of pocket or upfront bank financing.  And they lend themselves quite well to doing deals virtually, in any market anywhere in the US.  The willingness to do these virtual deals is a must in today's real estate business.

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