Hi my name is Dustin and I live on the pa/wv line near the northern panhandle. My question is I have about 100k that I want to invest in real estate. Am I better off to buy 10-20k dollar homes/duplexes that need completely renovated or spend 40-50k on something that just needs some updates. I'm new to this and not sure where to start. Any guidance would be appreciated. Thanks
Definitely start with a modest project. So light renovation would be the best.
If you're just getting started in real estate, I would avoid complete rehabs. Even for seasoned investors, they can be traps. You almost always spend more on them then you think.
Go find some fixers and buy with cash. Ideally find something with an ARV of 70k for example. Buy for 40k. Put 10k into the reno. All in for 50k. Then do a cash out refi for 70% LTV. Now you own that house and you've got nearly all your initial investment back in hand. Wash rinse and repeat. There's several factors to consider for this scenario but it can be done. Best of luck. Don't get involved in a major rehab. Keep it simple.
Thanks for the feedback guys. I think keeping it simple for the first investment is good advice! Also Jason Fike, I like your idea of renovating a sfh and taking the equity out on it to start another one. I appreciate the advice. I was also thinking of starting a business or Llc something so I could write off purchases, renovations, etc. Any advice on that part of the business??
@ Marvin S. Your idea is brilliant, thanks for sharing!