How to turn $1000 into $25,000 in less than a year

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How to turn $1000 into $25,000 in less than a year

Angela Jossy
Tacoma, WA · Member since 2016 · 41 posts · 16 votes

This is the question on my mind since I became obsessed with the prospect of purchasing a multifamily property and beginning my real estate career by house hacking. I have a good job and a steady income but saving alone will take me years to have a decent amount to cover down payment, repair costs and unexpected vacancies. If you were me, what would you do to get the investment capital I need? Help out an experienced investor and earn it while learning the business? (I am an apartment manager, graphic designer, web designer, social media expert, publicist, writer, festival planner and very connected person in Tacoma). Experiment with wholesaling? (double closing?) Invest in things like Lending Club and Prosper to earn interest on my existing savings? Finally finish writing my book on festival planning and market the heck out of it in hopes for a windfall of sales? Hard money? All of the above? Something else? What would you do to raise that capital in time to start 2017 as a bonafide real estate investor? 

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Andrew Ware
Gardiner, ME · Member since 2015 · 190 posts · 177 votes
10y
Since you are very connected I would use that resource. Talk to your network who knows you well. Tell them your plan, your problem, and ask advice how to solve it. You may find someone who knows exactly what you should do and have the $25k for you to do it. Or they may know someone who knows someone who has a problem you are perfect to fix. Or they may just help you refine the idea, then you talk about it to everyone you speak with. Once you have a plan stick with it. You sound like a creative interesting person. But the downside of that is that type tends to bounce around doing a lot of interesting things and not saving up the 25k they need.
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  • Jeff F.
    Rental Property Investor · WY · Member since 2016 · 243 posts · 221 votes
    10y

    Hi @Angela Jossy

    From what I understand, the Sea/Tac area is rather crazy right now, but I think since you want to house hack there are a few good options:

    1) Last week I saw a post about a portfolio lender in minnesota giving loans with just 3% down as long as you dont own a property already. I'm not sure how much capital you have or how much multi units are costing, but for 20k or less you could probably get in a multi unit that way.

    2) If the above is unavailable, look into an FHA loan - those only require 3.5% down (and you'll need to pay PMI) but again you wont need a lot of your own savings. However, they can be a bit nit-picky during inspections, so be prepared.

    3) You can purchase a single family home and "house hack" that by getting roommates. 

    Hope this helps.

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  • Steven Bond
    Developer · Provo, UT · Member since 2015 · 141 posts · 89 votes
    10y

    @Angela Jossy that's exciting you have so many pots in the fire and are so focused on making the most of your real estate career.  I would recommend one or more of the following tips.

    1. Connect with an excellent REALTOR experienced with investments. I used to live in Gig Harbor, WA before moving down to UT and really appreciated the knowledge and professionalism of Mike Esteb (in Gig Harbor).  He has consistently bought one property a year.
    2. Get established with a local REIA (Real Estate Investors Association) and network for a seller finance or potential partnership where you bird dog a deal and have someone bring in capital that doesn't want to manage it (some skin in the game will always help get someone else off the sidelines and bring them to your deal.
    3. If you have solid credit call local banks/credit unions.  With a great market they start getting more competitive with creative financing options for your first investment property much like the prior advice things like lower down payments are an option.
    4. Find the absolute worst dog of a home in a decent enough neighborhood (ensure it doesn't need to be condemned and no structural, meth, or mold issues that will supersede the overall benefits of it and flip it for a quick chunk of change).  Do this 5-6 times and start building capital on the side.
    5. Find a place to do a TIC arrangement or a syndication deal where you line up financing for a deal that is a great multifamily project and you put all the moving parts together to make the deal work.

    That's all I've got for tonight, but I truly wish you the best. I miss the PNW and can't wait to get back in just over a month.

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  • Andrew Ware
    Gardiner, ME · Member since 2015 · 190 posts · 177 votes
    10y
    Since you are very connected I would use that resource. Talk to your network who knows you well. Tell them your plan, your problem, and ask advice how to solve it. You may find someone who knows exactly what you should do and have the $25k for you to do it. Or they may know someone who knows someone who has a problem you are perfect to fix. Or they may just help you refine the idea, then you talk about it to everyone you speak with. Once you have a plan stick with it. You sound like a creative interesting person. But the downside of that is that type tends to bounce around doing a lot of interesting things and not saving up the 25k they need.
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  • Leslie Pappas
    Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
    10y
    Originally posted by @Steven Bond:

    @Angela Jossy that's exciting you have so many pots in the fire and are so focused on making the most of your real estate career.  I would recommend one or more of the following tips.

    1. Find a place to do a TIC arrangement or a syndication deal where you line up financing for a deal that is a great multifamily project and you put all the moving parts together to make the deal work.

    Regarding syndications, if you are an accredited investor, you can buy into institutional grade $50-125M projects with as little as $100,000 and diversify. Professionals with decades of experience and very impressive track records do all the heavy lifting for you. You get potential cash flow, tax shelter and appreciation. Loans are non-recourse. This is the world of Delaware Statutory Trusts. I wrote a book on this that was released in January called Cashing In Tax Free. If this interests you, you can start to learn more at my website. Please let me know if I can help. Leslie 

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  • Carlos RoviraBusiness Member
    Investor · Miami, FL · Member since 2015 · 329 posts · 124 votes
    10y
    Angela Jossy You mention you are web / graphic designer. I currently own a web design company and help other investors build web sites for their businesses. This is a great way to raise capital for that first deal. The majority of my acquisitions have been done with funds raised by my web design income. Always leverage your strengths and talents in order to generate additional streams of income that will help you with your end game (which I assume is passive income through real estate investing).
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