married homeowner with new baby on the way in California. Interested in an investment property/rental property. Don’t have a lot of cash, we have about $20,000. Good credit and good careers. IF this was your situation, what would you likely do, and where? I wasn’t thinking Florida (Orlando area) or another state.
Just brain storming and learning for now
Updated almost 3 years ago
I meant to say I WAS thinking Florida, not “wasn’t”
I’d go buy a single family rental in Memphis. That’s what I did to get started
Figure out where you are. Figure out where you want to be. Figure out what you can sacrifice to get you there. Once you’ve done that, meet the right people who will help you leverage your most valuable asset as a new dad (time) . Without doing the above or following a disciplined approach to your objectives analysis..you are likely to have a tough time...
“If you don’t know where you are going, any road will get you there”.
Hey @Dexter Knox
I'm not too far from you - Sacramento. I love Walnut Creek.
Real Estate is pretty pricing in your area right now. And when it's high people start worrying about forever missing out. But it's true, real estate moves in cycles.
So, know what I know now, I would:
1 - work on accelerating your home mortgage pay off using a HELOC. Read the Bank's Code by George Antone. Since you have good jobs and credit, I'd do this first to build your wealth at the top of this cycle. This is a low risk winner.
2 - Walnut Creek is the perfect place to create an extended stay rental. This is like an Airbnb except you'd focus on stay +30 days and more. You do this using rental arbitrage - meaning you'd master lease a small rental (preferably near a BART station), then furnish it, and market it as an extended stay hotel.
I like these options better than investing in FL. You have local knowledge ... you now just need to monetize it.
3 - The Walnut Creek market will come back down. At that time it would be great to have $20K ready to deploy. You do want to buy low.... after all.
The GOAL is to use the appropriate money making wealth creating strategies when you're in a seller's market season.
Hope that helps.
Hi there. It really depends on how much of a project you want to take on. 20K can do a decent amount of damage especially on your first deal. My first deal i found a duplex which i was able to buy, hold and now it has tenants. Or you could find partners who will invest with you, while you still manage everything. You could pay for a property in cash pay your investors with a 4% annual return to them, refinance after a year and then you have a decent property. Your investors are happy and you have a profitable property. But you have to make sure that you find a good deal which you can draw from the equity. This strategy is how i plan to buy my next property. If you have any questions please don't hesitate to ask.