Investing in Real Estate w/$20K

Dallas, TX · Member since 2017 · 9 posts · 0 votes

I have $20K saved up and I would like to get into real estate investing. The houses in my area are affordable, but everything in this price range ($0-$20K) is in poor condition and located in depressed parts of the city. Although these properties are not inherently bad, they are rent for only $700-$800 per month, they need a lot of work, and they are notoriously difficult to secure.

Does anyone have suggestions on how to get started in real estate investing without purchasing low-end properties? Should I consider alternative real estate investments such as land or office condominiums? What can I purchase within this budget without resorting to "ghetto" properties?

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Ian IppolitoBusiness Member

Investor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes

Personally, I avoid the low-end properties because the turnover and the maintenance can easily turn what looks like a bargain into a money loser. If you are determined to go ahead with it, make sure you do some research on what capital expenditures are, and include them in your calculations. Very often they will eat up the profit on low and Properties. Good luck.

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Percy N.
Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 904 votes
9y
Alex Ray with $20k, you should be able to leverage it for a loan of 70-90k Or you can look at Hardmoney and use your funds for the rehab.
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Gary Alford
Investor · Norfolk, VA · Member since 2014 · 164 posts · 51 votes
9y
I like the thought process of the more units under one roof the better. So I say start connecting with every wholesaler you can find to send you multi-units and maybe start reaching out to some multi unit owners yourself to try to get some creative deals and use that as down payment.
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Anthony Barbato
Investor · Rochester, NY · Member since 2013 · 103 posts · 55 votes
9y
I agree with Percy N. Find something in the $75k price range and put 20% down.
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Percy N.
Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 904 votes
9y
Another option is to partner with someone via a Joint Venture and split the risk and profit.
OR
If you are looking at a more passive investment, go to one of the crowdfunding websites which let you invest as little as $5k-$10k
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Ian IppolitoBusiness Member
Investor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes
9y
Personally, I avoid the low-end properties because the turnover and the maintenance can easily turn what looks like a bargain into a money loser. If you are determined to go ahead with it, make sure you do some research on what capital expenditures are, and include them in your calculations. Very often they will eat up the profit on low and Properties. Good luck.
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Larry Fried
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
9y
@Alex Ray You could wait to have more saved up, leverage your purchase with conventional financing (20% down) and get something that is ready to rent probably at $100k or more in that area to get something decent. Keep in mind that you want not only money down, but also closing costs, and reserves. You could also partner with someone or do some private lending to build up your cash.
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