I Have 10K . How can i get started in RE????

28 Replies

Hi BP Community!

This is my second post and i have already learned so much from all of you.

I have 10k (USD) Saved and am wanting to start investing. I am interested in buy and hold properties. Flips do not interest me as i have no clue what i would be doing, and i am also based in Australia for the next 14 months (university) but want to buy somewhere in the Houston area. 

Can i get started with 10k USD??? If so, HOW?

Thanks in advance!

@Tyler Crowell If you want to buy in the Houston area and are living in Australia, then I am assuming buying as an owner occupant isn't an option. In that case, It'll be hard for you to buy something in Houston with only 10k because I'm pretty sure the prices there are high enough that 10k wouldn't be enough for a down payment and closing costs on an investment property.

In that case your best bet is to maybe find someone in Houston to partner with who could not only help provide money to the deal, but could be the boots on the ground to manage the property since you are out of state. Maybe you get the loan and he provides some cash and agrees to manage it. 

@Tyler Crowell I own 76 doors in the Houston area. If you wanted to get started on your own with that amount of cash you would need to run a wholesaling campaign and follow up on leads. Just note that it requires a lot of time to get started. Unfortunately 10k is a not a lot of money to buy a property and perform the necessary rehab on a SFH.

Hi Tyler

Yes @Jeremy Taggart is correct, I feel your best option would be to partner up with someone on your first deal, turn your $10k to 15-20k then work up each deal from there

Reach out if you want to have a chat at all

Hey @Tyler Crowell , one thing I've learned in my brief experience in real estate, it's that you don't NEED money to get into a deal. At least not your own. There are many ways to make deals work with creative financing and partnerships.  With that said, congrats on saving $10K! It was probably hard earned, and I would caution you to be careful with it.

Being that you are a student in Australia with limited experience and not a ton of money to put in a deal, you have little negotiation power with potential partners. 

If there is something you could bring in addition to the $10,000, for example raising money from others to put into a deal or finding and negotiating a deal, your leverage goes up. The key in structuring a deal is to the best of your ability meet the needs and desires of all parties involved, equivalent to what they are bringing to the table. 

Not saying that you shouldn't get into a deal, but just wanted to caution you to make sure you are evaluating your negotiation power in the correct light. 

Keep the money and save.

Partnering up with someone you don't even know and you're on the other side of the world. Chances of this relationship working out...slim

When you come back, you'll have more cash. You can then vet people to see if they speak what they preach. Lot of people talk good game on forums. 
IF you don't find anyone you could then buy your own property with an FHA loan

@Federico Gutierrez   good advice.

one thing he could do though is go in on some of the crowdfunding sites that take 1k minimums.. so he can get some return while he builds his capital base.

for me personally I don't think anyone should be buying a rental house that does not have at least 20 to 25k liquid after down payment..   

owning rentals is just a small business and undercapitalized small business fail most everytime

Hello @Tyler Crowell  

Welcome to BP and the real estate investing world!

I would investing in educating yourself on the different paths to real estate and keep getting to know the operators in the Houston area. There are many different avenues within real estate such as wholesale, short-term rentals, and apartment syndication that it would be good to understand and start develop criteria for whichever strategy you want to work in.

If you ever want to brainstorm or have any questions feel free to reach out and connect!

Hi @Tyler Crowell

I might be the odd man out here, but with $10,000 you may want to seriously consider investing in real estate education before anything else. There are some great programs out there offered by reputable, successful people.

Armed with the right gameplan and mindset, you'll be able to use other people's money to fund your deals. And you'll have better deals, a proven system, and more credibility.

Investing in your brain at the start, in my opinion, is the best way to go.

1. Don't partner with strangers on the other side of the world.

2. 10k is more than enough to flip a house. i.e. (hard money is 2% + closing cost if your purchase is 65% of ARV - Repairs)

3. Don't wholesale if you don't know what you are doing. You can't. You need to know everything you need to know to be an investor, but also be able to find deals good enough an investor will buy it from you. Its far easier to find a deal with numbers that make real sense, and its why so many who wholesale get a bad rep. They just didn't know enough to locate, evaluate, contract, and promote accurately.

4. Don't invest in "education"- All of the good info is out there for free, and digging for it will take less time then a lot of programs.

Australia has a great market, New Zealand as well. Why don't you invest where you live?

Why Houston?

Invest in something like AHP Servicing for 10% preferred return while you continue to self-educate and save up more cash to buy a first property.

Originally posted by @Jeph R. :

4. Don't invest in "education"- All of the good info is out there for free, and digging for it will take less time then a lot of programs.

I strongly disagree. Perhaps in your world all the information out there is free, but in specific niches this isn't the case. It's a plague on BiggerPockets that everyone says "don't pay for education". I think a better way to say it is don't pay for gurus to tell you what you can get for free. 

I have invested high five figures in my education because the "free" information was crap. I'm much further ahead than my competition that's still spinning their wheels looking for free information. 

@Lucas Miller - you are probably right, however I look for knowledge not education. The difference being that I want the information w/out the biased of the individual or group whom i am obtaining the info from. 

I have found that MOST groups or clubs for REI have leadership with very little real world experience in real property investments.

If I could tell people "Get with some knowledge based people and make it happen" I definitely would. But....without knowing what they should and shouldn't know....they won't even know who is just a sales pitch guru or a real knowledge based  system of facts.

I am glad to hear your route worked out! I may have done better faster if I would have tried more of the "pay to play".

Originally posted by @Jeph R. :

1. Don't partner with strangers on the other side of the world.

2. 10k is more than enough to flip a house. i.e. (hard money is 2% + closing cost if your purchase is 65% of ARV - Repairs)

3. Don't wholesale if you don't know what you are doing. You can't. You need to know everything you need to know to be an investor, but also be able to find deals good enough an investor will buy it from you. Its far easier to find a deal with numbers that make real sense, and its why so many who wholesale get a bad rep. They just didn't know enough to locate, evaluate, contract, and promote accurately.

4. Don't invest in "education"- All of the good info is out there for free, and digging for it will take less time then a lot of programs.

Australia has a great market, New Zealand as well. Why don't you invest where you live?

stamp duty in AU will be greater than 10k  don't get anywhere in AU or NZ with 10k that's why a lot of the turn key guys did fly buy and went over there and did big gigs to attract AU investors .. AU investors in the down turn when their dollar got to 1.02 to 1.06 of the USD they were buying stuff over here for cash in droves.. now to be fair some of them really got hammered because they did not realize that a 80k house in Rochester was really only worth 25k at the time.. and they did not understand our tenant base in the US.. compared to theirs 

@Jay Hinrichs I would venture to guess that MOST investors should not invest in real property not in their area.

Doing real property investments isn't easy and shyte almost always goes wrong along the way. Being in another town is rough, being in another country is just silly. If you don't have the money to lose, then I wouldn't suggest that route.

Originally posted by @Jeph R. :

@Jay Hinrichs I would venture to guess that MOST investors should not invest in real property not in their area.

Doing real property investments isn't easy and shyte almost always goes wrong along the way. Being in another town is rough, being in another country is just silly. If you don't have the money to lose, then I wouldn't suggest that route.

Jeph that being said it happens by the thousands every month.. its the basis of the turn key industry.. Texas in particular gets a ton of out of area investors. 

Hi Tyler,

Finish school and don't start anything until you are complete and move back to the states.  I love the hustle and drive to get started now but you need to be 100% focused on investing and can't be in Australia.  It's very important to get started on the right foot and not get scammed or make a mistake early in your career.  Don't worry there will be plenty of deals and you won't be far behind.  Starting in your 20s will give you a tremendous head start.

I agree with Lucas.  Getting the right education is very important even if you have to pay for it.  I think in the beginning when you have little funds to work with.  Get all the free education that you can but when you have money to buy, a proper mentor can save you thousands or make you thousands.

@Jay Hinrichs - I am aware, its a large portion of my "business". I do property evaluations for investors (inspection, design help, budget, time lines, and comps) 3-4x a week and half of those are out of town investors. I try to discourage them from investing in properties out of town, but they rarely listen.

That being said, I have only seen a few who did a deal and totally lost their rear. But I feel strongly those would have lost even if the house was next to their own. Some people let the "fails" get to them, and every deal has some fails along the way. Distance just adds risk and stress. Two reasons I would never list as to why I do real property investments; I am trying to avoid putting my future in others hands as much as possible.

Find a handful of other investors in Houston, or in the area that you select.  Find some that are involved in private money lending, and have specific criteria and have done a few deals.  Maybe one guy has $25K, another has a bit more, whatever.  Just find a few folks that have done this before, that have a track record that you can verify.  They will be here on BP.  And ask if you can partner up on a deal that they are doing, just to learn how it all works.  Sure, you won't make a ton, but you are managing the risk as well, and at least you will know how it works, what it looks like, etc.

From that point, I agree with the comments by @Frank Wong.  Once you have that money put to work, focus on what you are doing over there.

Originally posted by @Tyler Crowell :

Hi BP Community!

This is my second post and i have already learned so much from all of you.

I have 10k (USD) Saved and am wanting to start investing. I am interested in buy and hold properties. Flips do not interest me as i have no clue what i would be doing, and i am also based in Australia for the next 14 months (university) but want to buy somewhere in the Houston area. 

Can i get started with 10k USD??? If so, HOW?

Thanks in advance!

Can't get started in Houston with that kind of money and I don't recommend investing in the Midwest areas while being in another country. Midwest markets are truly one of a kind. One block could be great and the next block over could be a war zone. 

I would continue reading/listening/learning while saving up more money. Best of luck.

Originally posted by @Jeph R. :

1. Don't partner with strangers on the other side of the world.

2. 10k is more than enough to flip a house. i.e. (hard money is 2% + closing cost if your purchase is 65% of ARV - Repairs)

3. Don't wholesale if you don't know what you are doing. You can't. You need to know everything you need to know to be an investor, but also be able to find deals good enough an investor will buy it from you. Its far easier to find a deal with numbers that make real sense, and its why so many who wholesale get a bad rep. They just didn't know enough to locate, evaluate, contract, and promote accurately.

4. Don't invest in "education"- All of the good info is out there for free, and digging for it will take less time then a lot of programs.

Australia has a great market, New Zealand as well. Why don't you invest where you live?

2. What HML is that?

@Jay Hinrichs absolutely agree here. Crowdfunding sites like fundrise would be a good place to start with some of that $$ and start learning. Easy to get in with 1k.

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@Tyler Crowell   Way to start early. My suggestion is take things slow and get a lot of feedback and referrals for anyone you eventually do business with or for any RE education. Biggerpockets is here to give a lot of free advice and education-which is fantastic. Be very careful with buying training as the money can go fast ( I have experience with this) and you may be left still needing more. Ask questions here and soak up all the RE info you can. Come back to the states having a plan and be ready to execute. You are already ahead of so many of us by starting so young!

@Tyler Crowell I agree with @Jeph R. . Be wary of partnering with A) anyone when overseas and B) in a market you're unfamiliar with.

To answer your question though, yes you can get started with $10K. You can also get started with $0 if you have the time and the hustle to create value for others. I wouldn't use any of your money to pay for education right now. There's more free information online than you could ask for. What most people need is less info and more action. My encouragement would be to invest where you are right now. I wouldn't spend your time and energy trying to establish yourself in a market on the other side of the planet. There is opportunity everywhere - you just have to look for it. $10K will go a long way if you're looking to market for wholesale deals.

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