Good morning all,
First off, I'd like to introduce myself as a new community member. My name is Richard, I'm 31 years of age, I work for the government, a big-time fitness enthusiast and just recently inherited a small chunk of money after my mothers passing. I have always been interested in rental property investing and naturally stumbled upon "The book on rental property investing" after reading "rich dad poor dad". I have $20k sitting and am very excited about making my first deal happen this year. I live in Sacramento, California, and am looking to scoring my first deal soon, hoping I could connect with you all and attain some guidance and advice from anyone willing to reach out in these forums. I'm excited to connect with you all, and can always trade fitness advice for real-estate advice.
@Richard Swift Good morning Richard. Welcome to BP.
My condolences to you on the passing of your mother. Hopefully with this inheritance you can do great things.
First thing I would do is speak to a local lender. That person will give you a realistic idea of what to expect with that kind of down payment.
If you're not able to fund a deal on your own, you can get help/ideas by attending a local meetup or real estate inventing group event. There are several in the Sacramento area.
Meet people, shake hands... Networking is a great way to learn from people with experience.
Best of luck!
@Richard Swift sorry to hear about your mom. I am far away from CA but I know enough to know that $20K doesn't go very far around there. What are your real estate goals? one great way to get started is to buy a owner occupied 2-4 unit property. Live in one unit, rent the other units out. This will allow you to get a FHA 3.5% down payment loan. of course, this would require you to live in the building, if that isn't something you are willing to do you will likely need a 25% down payment for a pure investment property, in which case you are likely going to have to look out of sate, as $20K isn't going to get you 25% down on anything near you.
@Richard Swift i am local to you so if you ever have questions just send me a message. Are you going to live in the property? If so then you can get in with a lower down payment? If not 20k will not be enough of a down payment with today’s prices. You can also go to the local rei meetings that happen every month to learn and network .
Sorry to hear about your loss. Living close to Sacramento I think you can find some decent deals in that area, but if you're able to branch out a bit, here in Lodi you can find more opportunities. I have a great real estate agent who'd I can put you in contact with. Shoot me a message and I can get it to you.
Let's catch up over a beer or a basketball game! Happy to share my experiences with Sac Rentals.
@Richard Swift A good place to start is continuing to educate with more books/ podcasts. Eventually building a team will be essential to your success- Lenders, RE Agents, Property Managers, Insurance Agent and then building your inner team if you decide to form an LLC or something- Money partner, Contractor, Etc. I've met one of my business partners at the gym- he's one of the most well known licensed GC's in my area.
Continue to educate and save more money. As others have said $20K is not going to go very far. There are additional costs up front in purchasing and you must hold back reserve funds to insure you have the cash for emergency repairs. You probably only have about $10K out of the $20K for a down payment.