Salisbury, MD · Member since 2018 · 2 posts · 0 votes
I am currently working full time and I have saved up 10k that I am able to invest. Some background on me, I am fairly new to real estate investing and I am still learning, 25, and I work full time. Ive been learning as much as I can and feel lIke Im ready to get my first deal done. With that being said I would like some feedback on what to do next.
Should I invest in real estate? Or wait and put my money in a mutual fund and wait to have more money to invest?
Hi Luis. I would recommend continuing to learn and building up your savings. You can start networking and contacting realtors, contractors, property managers, etc... to build your "Core 4." You could also try to find another person to partner with on a deal, where you have to bring little/no money and just put in sweat equity. $10k, depending on the investment type, is still slightly low for purchasing a passive rental property. Even properties that are usually $40k-$50k will usually require some extra capital for repairs (as well as closing costs).
Hi Luis. I would recommend continuing to learn and building up your savings. You can start networking and contacting realtors, contractors, property managers, etc... to build your "Core 4." You could also try to find another person to partner with on a deal, where you have to bring little/no money and just put in sweat equity. $10k, depending on the investment type, is still slightly low for purchasing a passive rental property. Even properties that are usually $40k-$50k will usually require some extra capital for repairs (as well as closing costs).
You will need more money not only to buy but also as a reserve fund. Keep saving you are still young and investing is not a race, contrary to what others may think.
10k is a little light to buy your first property on your own, but it's a great start.
Some options early on before the war-chest builds up can be partnering (Joint Venture) with an experienced investor you trust. With little money in, you'd likely have to invest some effort/time to make it worth for them, which may be a bit difficult with the day job. Not impossible though.
I have private lenders who loan small amounts like this for a year at a time, but they have reasonably high risk tolerances and a whole lot of trust in me as a borrower. Your mileage may vary.
And another path many follow in their early days is the house hack, using a low down payment owner occupied loan to purchase a property that has extra space you can rent out as well. These loans can have as little as 0-5% down payment requirements, so you can stretch that fledgling war-chest as far as possible.
Honestly I tend to agree with @Benjamin Seibert and @Thomas S., recommending that you keep practicing your underwriting while aggressively building up your war-chest. It becomes much easier, and much less risky as it grows, and there's nothing wrong with having the first 25-50k accumulate with disciplined saving. That discipline when money is tight will be extremely useful when money isn't.
Thanks you gentlemen for the recommendations, I’ll keep saving as much as possible. If you guys have any recommendations for any books to read I would greatly appreciated it as well