$10,000 to invest

16 Replies

If you had $10,00 to invest in real estate what would you do with it?

Find a partner, and come into a deal as a GAP partner.  You'd get a small % ownership of a deal, or they would pay you for the use of your funds over a short period of time.  Repeat the process with other investors, or the same one since that investor would probably be doing the same thing again, and would probably need your $10k (now bigger) again.  Continue to do this until you have enough to go on your own.

Joe Villeneuve

I've bought several homes in the 10k range and rent them for 750-800/mo range.  It can be difficult to find good tenants, but when you do, it is worth it.

@Jassem A.  I've bought homes that cheap too.  The problem is, he needs to have that money make him money that he can use down the road, faster than he can with one rental.  He needs to build up to the point where he can go into the market for houses at  the $50k range, with all cash.  Once there, he's on autopilot.  Putting all of it into one house to sit, means that $10k just died.  Cash must be moving to have value.

Joe Villeneuve

The 10k is not dead if it's rented. It's making him 500-600/mo. With some luck, it will pay itself off in a couple of years. I've purchased a house for 10k put about 5k into it and took out a HELOC for 41k. After a few of these, it starts to make sense.

The 10k is dead.  He has 10k, not 15k like you had (+ 5k into rehab).  If he's making 500/month, and he never has a vacancy or expense, he will make $6k a year.  After 2 years he gets his $10k back.  At that point he's making 500/month and has 12k...and 2 years of his investment life he can't get back.  You can always get your money back, not your time.

If he GAP funds for an investor, and makes 5% per month, and reinvests his profits, he'll have over $30k at that same 2 year mark.  Now he can do both.  Tak the $10k (15 with rehab) and do that property as you suggested, and the other 15k+ stays in the GAP system.  When the GAP program gets enough for the next property he buys that house, and keeps the rest invested in the GAP program.  Just keep that "wheel" spinning.

Spend/Invest the profits only, and the original funds don't die.  Park it equity, and it dies.

Joe Villeneuve

If he has a decent job or source of income then I'm sure whatever property he buys, he can afford to fix on his days off.  

As soon as the house is fixed, he can take out a HELOC and buy more properties at his leisure and produce more income.

I'm not sure what the GAP system is but it doesn't sound much better than buying volatile stock.  I'd rather have some kind of assurance that I will get something for my money in the long run.  A deed to a property will go a long way in the right hands while percentage ownership in some kind of real estate business scheme may go somewhere or nowhere, much like stocks.  I'd rather have some kind of control over my investments.

@Jassem A.  GAP funding.  You become a short term partner on a flip.

Joe Villeneuve

@Jassem A.:  Where in the world are you buying houses that net $500 per month?  I want some of that and I have a lot of investors who want that.  @Joe Villeneuve has the right idea: you need to leverage your money to turn it into more money. You don't need $10K to do a joint venture though. You need to tie up a property with a purchase contract and an Earnest Money Deposit (EMD) and find an investor to put up the money for the deal. If you don't have experience to make the deal happen, then you work with a management company to have them manage the deal for you. You bring value to the deal because you control the property,

Take your $10K and leverage it.  Try to get a cash-on-cash Return On Investment of at least 25% over a 6-12 month period.  It's such a low amount, that it will be hard to leverage it on a real estate without doing a joint venture.

God Bless You!

I'd find a 2-4 unit that you can get an FHA loan on, put the minimum down, move in it and fix it up and/or rent it out while you live in it.

Personally I second chris on this one. Find a duplex for under 100k and as long as you're a first time home buyer and willing to live in the property, you can get an FHA loan for 3.5% down. That way you could possibly be living for free because your gaining rent from the other side, will have plenty left over for closing costs and get you started on any immediate rehab needs. If you're living for free or close to it, you should be able to quickly save for another property or at least do a quality rehab over a few months on this one.

@Michael Evans

There are 10k properties that you can sometimes find around Downtown Newport News, Norfolk, Portsmouth and sometimes other areas in Hampton Roads. They will typically rent anywhere from 700-900. Many other parts of the country have properties around 10k as well but I'm not sure how much they would rent for. Most of the time they are HUD owned properties or foreclosures that the banks don't want to deal with.

personally, i would buy several houses with the $10k, flip a few to get my $10k back and rent the others. keep repeating the process until you have set yourself up with enough cash to invest in  a better area

@Michael Evans  we have them all over the place in KC for sale in the $20k - $35k range that net $500 monthly.  You CAN buy them cheaper than that, but not anywhere you can go without a gun :)

@Chris K.  I agree that is a great way to go.

@Jassem A.  , I could be wrong, but it seems like you are overstating how easy it is to find a $10k property, rent it, and start cash flowing. I have bought houses in Alabama, Georgia, and SC, which are all states with tons of low price houses, and I have never seen a $10k house that did not need some kind of rehad. Are there a few diamonds in the rough? Probably so. But you and I know, those deals are few and far between, so I wouldn't give @Account Closed  the impression that finding a turn-key property for $10k will be easily accomplished. I do not ever want to say that someone is flat out wrong, but I respectfully disagree.

@Rod Smith

Never said they were turn key. Most of the ones I buy need minimal repairs or I will do most of the repairs myself and end up spending under 5k where someone else might spend 10-20k on repairs.

It's not easy--they take work to fix and to find a decent tenant. It's worth it to me but may not be worth it to most other investors which works in my favor.  The fact that many investors think they need a gun to go in these areas is great for me since I know it's not really that bad (most of the time).  Sure, people get shot occasionally but it's mostly because of a drug-deal gone bad or because someone stole $5.

Originally posted by @Jassem A. :

I've bought several homes in the 10k range and rent them for 750-800/mo range.  It can be difficult to find good tenants, but when you do, it is worth it.

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