With $5k to invest am I out of my league?

12 Replies

Ive got $5k to invest that if I lose I would fine without the money. With most conventional loans requiring 20% down, am I just completely out of my league in thinking that I can start investing in real estate? Is there anything that I can reasonable do with the small amount of money out of pocket?

Sure, use that money to start up marketing for a wholesaling business!

I bought my first property for $2,900.00 total.

We fixed it up ourselves, with what money we could dig up.  Today it rents for $600.00 month.  We bought the house in 2002

Cheap houses make money.

My nephew just bought his first investment house in Virginia. He paid $11,000

Another suggestion is to find someone you trust who also has a small amount to invest and do it together. 

Originally posted by @Jon Klaus:

Do you own your home, Pedro? You might start there with a FHA mortgage tha requires just 3.5% down. Later, when you move out, you can convert it into a rental.

 Jon,

Currently live in a home that is owed by the family I just pay the mortgage/rent. How long does one have to live in a fha mortgaged property before you can move out and rent it out?

Originally posted by @Pedro Oliva:
Originally posted by @Jon Klaus:

Do you own your home, Pedro? You might start there with a FHA mortgage tha requires just 3.5% down. Later, when you move out, you can convert it into a rental.

 Jon,

Currently live in a home that is owed by the family I just pay the mortgage/rent. How long does one have to live in a fha mortgaged property before you can move out and rent it out?

 One year. 

Check out tax lien certificates, and wholesaling

You could possibly try to use some creative financing, like using a promissory note for the down and having the seller carry the 20%.  

You could use a 3.5% HUD loan on a duplex/triplex/quadplex, live in one unit, and let your tenants in the other units pay your mortgage. If you find the right place, you could have a positive cashflow and live for free.

@James Wise  

Crowdfunding is a no go. The is illegal to raise money for "investment related" causes.

@Arlan Potter   Can you tell me the "specs" of the property that you and your nephew purchased for such a low amount?

@Pedro Oliva   It depends on a lot of factors including available time, areas of expertise, what your likes and dislikes are, etc. 

The suggestion to invest in marketing and wholesale to build funds may be a great idea, or bad advice ... depends on what you know, and your personality. Investing with someone else might work, or might be a disaster. What I would suggest NOT doing is a mistake people make in REI all the time. Don't go out and buy a cheap property just because you can afford it.

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