Hello my name is David, I’m from Dallas, tx. I’m new to the bigger pockets forums. I would greatly appreciate help with advice on what to do with my current profit of my house and how to get started. My current project profit it’s 83k. Any advice in what to spend on or how to begin on this would be helpful.
Welcome to the site! I would figure out what route of investing you would like to go. But and Hold, BRRR Strategy, Renovation Loans, Fix and Flip. There are benefits and drawbacks to all financing and investing methods. A big strategy that many investors choose to go is to purchase a property that needs some work to create equity in the property. You can Buy, Rehab, Refinance - to get your cash out and then Repeat. To go the Renovation route, you would purchase with the required down payment and then renovate with the financing. This method requires less out of pocket and allows you to get into properties that do not qualify for financing. Let me know if you have questions on these financing methods.
Hello Jerry thank you for taking the time to help. I’m considering looking for a buy an hold propertie. Ideally after listening tot he podcast would love if a could find something with a main house and rental suite. Do you think I can use some of the money for financing and some for renovations.
Just to be clear you mean your planning on selling your current house and then buying a new duplex? Depends on your price range and your financing options. Assuming you put 20% down of $200,000 your looking at about 45k for down payment and closing costs leaving 38k for renovations which should be plenty.
The most terrifying phrase in RE. I got my info from a PODCAST! Do what you did to get your $83k profit,
Based on what you have already said here, I would slow down and educate myself.
As Jodi said above, don't just roll with what you're hearing in the podcast.
Buying a property to rent could be a great thing for some passive income, but what about finding a property to flip and then you're increasing your initial Capital much quicker.
Say you just buy a rental now and use all of your money, then what? You wait for 5-10 years while you have $300 a month in profit slowly build back up enough to buy another property? I almost made that mistake at first. I'm so glad I did not buy rentals from the beginning. Flipping allows you to increase your Capital more quickly. Then, you buy a rental and do a few more flips and buy a rental and do some more flips and so on. You keep increasing the capital with flips while slowly adding passive income properties to your portfolio. I'm very new to this, but that just seems like the logical method to me. I could be wrong and would love to hear some other input if I am.
The main thing though, slow down buy some of the really highly recommended books discussed on this forum and read them. Spend a lot of time on this forum reading as well. You need to heavily educate yourself before you make any sort of move.
The podcast is fun and can be helpful but it is a lot of people talking about what works for THEM. The same methods may not work as well for others. Figure out what makes the most sense for you by taking the time to learn and talk with people.
@David Cervantes I second those here who advise you to pump the breaks a bit and do some research. In REI, as in all investments, it can feel frustrating to sit still - you feel like you always have to be DOING something. Don't let that mindset creep in - take your time and figure out your goals.
@Jody Newman makes a good point - what did you do to net that $83k? Is that something you can/want to do again? Depending on how long it took you to make that profit and how much capital you needed to deploy to make it happen, you could just rinse and repeat.
Again, however, it all depends on your goals. If you made that profit by buying distressed property and rehabbing it by hand, you have to decide if you want to put that much work into future projects. There's no right or wrong answer, but I'd encourage you to really nail down your priorities re: time, energy, engagement, and returns. Are you willing to sacrifice a little bit of your return in exchange for something more passive (like turnkey), or do you have the time and resources (and desire!) to really get hands-on in order to maximize your ROI (DIY rentals, flipping, BRRRR)?
You're in a great place to get all the info you need, so I'd make the most of BP and figure out what investment types will best suit your priorities and goals. Set up progressively more specific keyword alerts for niches and markets that interest you, reach out to pros who clearly know what they're doing and have experience in the investment types you're considering. Go to a local REI meet-up in your area.
I don't typically advise people to leave cash just sitting there, but if you think you need a solid amount of time before you're ready to dive in, consider sticking that profit in an indexed ETF or another diversified investment (I'd choose ETFs over mutual funds, however, due to load fees and withdrawal limitations).
When you do narrow down your goals and figure our which investment is best for you, make sure you do keep a little bit of that cash pretty liquid to cover unexpected capex costs and other expenses - never deploy your last penny, always keep a reserve as a safety net.
With a solid profit already under your belt, you're in a great position already. Just don't let the desire to be in constant motion force you into making a rushed decision. Take your time, explore your options, ask questions.
Best of luck!
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