Help!! My Wife Only Gave Me $10K

125 Replies

So here's my challenge.  I want to start investing in RE but my wife isn't so thrilled.  She says I can have $10K to start out with.  If I can make some money using that she says I can have more.  (Guess who pays the bills?)

So, I said to her, "How do you expect me to do anything with that?"

She says, "You're always on that Bigger Pockets website.  Why not ask them?"

So here I am.

What do you all think?  She says I have to do this alone.  No cheating with Clubs, partnering up, etc.

Would you go for a mobile home?  Vacant land?  Can you make any money with $10K?

I'm no pro, but I'd take 1k at least and do some marketing. Buy an absentee owners list and send out some flyers, maybe do some bandit signs depending on the are. 10k isnt a bad way to start... 

Thanks Randy.  What would you put on the signs or in the fliers?

I think you're approaching this the wrong way.  Rather than have to "prove" to your wife something, maybe you should involve her more and talk with her and make it a project both of you can get into. Otherwise it seems like a "you versus her" thing.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz | Podcast Guest on Show #29

For bandit signs the usual "I buy houses" is good but bandit signs can be a huge pain. Its time consuming and a lot of them get taken down.. In my market there are a lot of elderly homeowners, so I use hand written yellow letters because they seem to like intimacy. it makes it feel more compassionate than some printed thing. If you are newer to the game, sit on youtube for an afternoon and just watch videos on marketing. You'll be a pro in no time. Just type in things like real estate marketing 101, yellow letter campaigns, bandit signs, absentee lists, yata yata. Good Luck! Cheers! 

My wife and I have gotten along beautifully for 30 years.  This just doesn't really interest her the way it does me. (Unless it makes money of course.  LOL )

if @Dawn Anastasi approach doesn't work.... You could always use some of that money to become a middle man....

For example I am going to be a home inspector, I generate income. Connect with people by default and increase my network so under technicality I (being you) will have real return on the money loaned out.

But repay her the 10k because a woman will hang this over you no matter what. And as I expect @Jon Carter she will inquire to the responses.

Dawn has a point there are bigger issues that lay beneath this,communication is key. 

Disclaimer : I have never been married so this advice is from a single man

I'd back up just a second.  What is your goal with this money?  To invest it for the long term or use it to start a business?  Both are viable options with real estate, but these are very, very different approaches.  

The suggestions about buying a list and doing marketing assume you want to create a job.  Wholesaling, fix and flipping, developing, property management, brokering, etc. are all jobs.  You can invest some cash to get those jobs rolling.  But you also have to invest effort (i.e., finding lists, writing letters, sending them, taking calls, evaluating deals, etc.) and time (for the letters to get out and replies to come back, then negotiating deals, etc.)  Are you willing and able to invest that time and effort in addition to the money? Are you willing to invest the time and effort to learn how to value properties and estimate rehab costs?

Or, are you looking to start building long term wealth with the expectation of future returns?  Like buying stocks or bonds.   If so, what sort of rentals can you find in your area?  $10K isn't much to start, unless rentals are really cheap in your area.  Like sub $50K.  But even if they're more expensive than that, you might find a seller financed deal you could buy with less than 20% down.  Or you might find a deal you could buy using hard money, fix up, and refinance.

But, start first with your goal in mind.  What's your goal here?

Jon Holdman, Flying Phoenix LLC

I also think you should talk more with your wife. If she's stipulating that you got it alone, you're dead in the water. Any successful investor on here will tell you this is largely a team sport.

That said, your best play in my opinion is to not let the money burn a hole in your pocket. Figure out what you want to do first, then figure out how to do it and what your starting costs are. You may realize you've got more than enough with that $10k.

Sounds good so far.

I'm getting the idea.  Have a more solid goal than just investing.  Be more specific is what I'm hearing. 

I like the feedback regarding seller financing.

The advice about the wife is off the mark.  She is extremely supportive but has a career of her own.

I'm reaching out to you all for your best advice on what to focus on.  I've got the time and can put in the effort.  I just need to show her that there will be results.

My question to you: do you have a job?

Jon Carter what about tax liens?? Small business notes buying at a discount??

Have to know what you are doing but can get started small. A lot will depend on what your wife considers a win on an annual pre-tax return basis. Is it 5%,10%,15% a year return??

Also the time before the investment throws off the anticipated return matters as well. Does it give the money back plus XX percent in 6 months, 1year, 3 years, etc.??

It's sounds smart if you never bought anything for her to give you  a little money to see if you glide across the water or sink to the bottom. The partner or no clubs sounds like she doesn't want someone else creating the success for you. She wants YOU and you alone to get out there and do the investment and take ownership whether it does great or it flops. 

Medium allworldrealtyJoel Owens, All World Realty | [email protected] | 678‑779‑2798 | http://www.AWcommercial.com | Podcast Guest on Show #47

i agree that the spouse needs to be on board.  also you will need find your niche and focus on creating value in a deal within that segment of RE.  (finding an under value home, sweat equity in a flip...etc)  as mentioned above, is this an investment or a job for you?  this will help guide you to your niche.  the 10k can be a down payment on an investment or seed money to start your new job.  

What I mean with the partnership is everyone is supposed to contribute equally but sometimes one person is creating the success for the others and driving the investment. In that situation you could claim success with the project but have very little to do with it. Probably why she said no partners or clubs. 

Medium allworldrealtyJoel Owens, All World Realty | [email protected] | 678‑779‑2798 | http://www.AWcommercial.com | Podcast Guest on Show #47

Hi David and Joel!

Yes, I have a job doing consulting so I really set my own hours.

Joel: She wants to see me get in and out of a deal with at least a 25% return within 6 months to a year. I know - 25% ROI !!! Sounds great but the amount is so small I would hope t be able to do that at least. BTW What is small business notes buying at a discount?

Sorry, just to be clear the consulting is regarding setting up medical practices.  Not real estate.

You have a bigger issue than the $10k. Your wife either believes in you or she doesn't. Expecting a 25% return in 6 months for her to get behind investing in real estate is an unreasonable expectation. She is setting you up to fail. If you can't sell the benefits of investing in RE vs other investments then you are either a terrible salesman or your wife cannot do basic math.

My wife is a tough cookie so I understand where you are coming from and am making no statements about her or your relationship... But this thing won't with without 100% buy in from both parties.

Hi Joe!

Thanks.  Actually we both thought that making $2500 wouldn't be that hard.

@Jon Carter

 OK .... STOP THE CLOCK! The FIRST thing you need to do is tell your wife that if she doesn't want to be involved in the investment that she doesn't get to stipulate the rules, put limitations on what you can and cannot do; and tell you what return you have to make, as she's tying your hands behind your back to begin with. Does your wife want you to play a game and gamble your money, or does she expect you to do your homework, learn the market, and invest in something that will bring maximum return with the smallest risk?  If the latter, then the boundaries have to go.

Then, you need to get out and get a lot more information for us to go on. 

  • What is the average price of a home in your town?
  • What is the market like? 
  • Are there a lot of homes for sale?
  • Is there a good rental market?
  • What are rents on a typical home?
  • What is the economy like? 
  • What is the employment rate?
  • What are your skills and experience? 

The point is, you haven't given us enough information for anyone to give you an answer. If you have a limited amount of cash to work with, you need to use it wisely, and to do that, you need to know what is possible, what makes the most sense, etc. Good luck. 

Medium house plansKaren Margrave, Parlay Investments | [email protected] | http://www.parlayinvestments.com | CA Contractor # 680782

@Karen Margrave is dead on with everything you said.

I only suggested being a home inspector because networking will only get you so far..... Either you are giving up your time and undergo mentoring by a season professional. 

Bring a tangible to the table (like a party in the process for the route you choose to make your niche)

Example: 

 -contractor

 -Professional painter

-home inspector

-underwriter for Loans

People are in the incentive business this is what makes us by default Salespeople.

Why should I help you? Even helping a newbie is not self less. Because a persons knowledge and know how will affect lives unseen to the mentor.

-

Actually we both thought that making $2500 wouldn't be that hard.

Making a 25% return in six months - i.e., a 50% annual return - is, sorry, a ridiculous goal.  If the only way to show success in this venture is to generate that sort of return, don't bother.

The ONLY way you have a shot at such a return is something with VERY high risk.  Risk in investments means the investment has a wide range of POSSIBLE returns.  The upper end of that range for some investments might hit 50%.  But I assure you the bottom end of the range for such investments is -100%.  That is, a total loss.  

If you can do one wholesale deal for a $100K house, netting $2500 is a pretty reasonable number.   Maybe more.  So, if you try that, what's the odds of closing a deal within six months with a $10K budget?  I honestly cannot put any number to that.  I've spoken to a couple of wholesalers here and their monthly marketing budget is $10K.  You're going to spread that over several months.  Will you get a deal?  Maybe, maybe not.  If you don't, you hit the total loss end of the spectrum.  If you do close a deal, you make your goal.  Some folks are successful doing that business.  Many are not.  You're in a better position than many who try because you do have that $10K. 

If you can find the right deal, you might do that with a fix and flip. You would need to good, but small deal. Say something you can buy for $50K, put $20K into it and sell for $100K. If you can find a HML that will fund the deal with you having only a total of $10K of your own cash, and you can find such a deal, then you could potentially make well over the $2500 goal. You probably won't start now and finish that in six months, though. Finding deals is hard. Then with the rehab, listing and then closing the sale, its likely to take longer than six months.

There is a very real risk of a loss in this situation, too.  A partner and I funded a $148K loan to a rehabber on what looked like a good deal.  The rehabber put about $30K of their own money into the deal, we think.  But got caught without all the necessary permits.  And had a problem with comps because this property was on a busy street.  So couldn't get the price that was originally projected.  They ran out of money and walked away with a $30K loss.  My partner and I took the house, finished the rehab and sold it.  We had a loss on the deal, too, but much less than $30K.

Jon Holdman, Flying Phoenix LLC

Originally posted by @Jon Carter :

So here's my challenge.  I want to start investing in RE but my wife isn't so thrilled.  She says I can have $10K to start out with.  If I can make some money using that she says I can have more.  (Guess who pays the bills?)

So, I said to her, "How do you expect me to do anything with that?"

She says, "You're always on that Bigger Pockets website.  Why not ask them?"

So here I am.

What do you all think?  She says I have to do this alone.  No cheating with Clubs, partnering up, etc.

Would you go for a mobile home?  Vacant land?  Can you make any money with $10K?

 10k is a good sum of money to invest into marketing, wholesaling homes could give you some more cash from deals. I would save up from wholesaling then invest into a buy and hold, fix and flip, etc

OK  I have one question that I am kind of lost on.

Isn't wholesaling a lot like being an agent/broker without the license?

Originally posted by @Jon Carter :

OK  I have one question that I am kind of lost on.

Isn't wholesaling a lot like being an agent/broker without the license?

Its EXACTLY like being an agent without a license.  Wholesalers use techniques like assignments and double closings to avoid actually doing unlicensed brokering.  But the job is exactly the same as what agents and brokers do.

Jon Holdman, Flying Phoenix LLC

oh boy @Jon Carter this is another can of worms in itself but I am glad you are asking questions....

This post will get really long lol

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