I have $4k what should i do to start?

Question

I have $4k to cash on hand. And really want to start real estate investing. I have been wanting to for a while but have not had the courage to start. I have read books and been online youtube university. Any ideas or suggestions?

Jason G. · Answer

Keep saving and keep reading.

Julie N. · Answer

@Amanda Anderson save up enough to have 3.5% for an owner occupied m/f.  Live in it, fix it up , rent other units out while you live there. Then go from there.

Spencer Abeyta · Answer

Hi Amanda!

It will be very hard to invest with only $4k to start, but it's not impossible. It depends on what market you are looking at with how far your money will stretch. I see that you are a real estate agent and that gives you an advantage in my opinion. You have access to a local MLS and from this you can get an understanding of what houses are selling for in the area. This helps you be able to quickly identify a good deal when you see one. I understand the want to rush into a deal but I think it would be better to put yourself in a better financial position so you do not strain yourself on a deal. I would work hard building your real estate agent business and saving away money from every sale to go towards to funding a deal. This is advantageous because as your client base grows you are bound to connect with people that are investors and from there you need to build a relationship with them. This could involve taking them out to coffee or even giving them a reduced commision on a sale or purchase. Once you build a relationship and have more money saved up I'm sure an investor would love to consider going into a deal with you. If you get a deal with them this is an amazing opportunity for hands on learning and adding more tools to your toolbelt as David Greene likes to say. Then with this experience you can decide where you want to go from there. Good luck!

Joseph Pratt · Answer

@Amanda Anderson establish an emergency fund equal to 3 months of your salary, payoff all consumer debt, then invest whatever is left...

Caleb Heimsoth · Answer

@Amanda Anderson. Stick it in a public REIT

Kyle Reynolds · Answer

You could go ahead and purchase a Primary Residence (if you don't already have one) using an FHA loan.  I've heard there are some grant programs for primary residence purchases; you should talk with a Mortgage Broker about it. Basically if you can get free money from a grant program to help, then use your $4k towards the purchase of your own home and build up some equity in it. Then you're heading in the real estate investing direction.

John Murphy · Answer

I second @Julie N.'s recommendation on the FHA 3.5% down option. Target a triplex or fourplex so you have more residents paying down your mortgage and, if you buy right, can put a little extra in your pocket every month. Then bank all of the rent/mortgage payment along with the cash flow for the next property.

Simultaneously, it is incredibly important to educate yourself on the industry and grow a strong network. Join as many local REIAs/Meetups/Conferences/Boot Camps as your schedule and budget will permit. Tell all your friends, family, colleagues, and anyone who will listen for 30 seconds what it is you are doing and plan to do!

Best of luck!

Neal Ward · Answer

@Amanda Anderson First, pay off any and all debt. Second, do you have at least 2 years on a full time job. Third, how’s your credit...do you have any negative reports? Assuming or once your credit score is around 620 or higher, hire a realtor in your area. Go with a FHA loan and get your realtor to negotiate that the seller pays 6% of your closing cost.

Neal B. · Answer

@Amanda Anderson

Get a really good deal under contract & flip it to an investor

Tuvia Goldstein · Answer

@Amanda Anderson

Find a deal, get an investor, throw in your 4K to have a share in it and get a cut for putting the deal together as well.

I have $4k what should i do to start?

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