$20,000 in Savings-What should I do? Any Syndicators out there?

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$20,000 in Savings-What should I do? Any Syndicators out there?

Wiley Underwood
Denver, CO · Member since 2018 · 7 posts · 7 votes

Hi guys, 

I am starting out in real estate investing, and have $20,000 saved for an investment. I live in Denver, Co. and am looking to join a syndication so that I can learn as much as possible. I hope to house hack one day, but don't have the capital. What would you do with only $20,000? 

-Wiley

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Steve K.
Honolulu, HI · Member since 2017 · 247 posts · 315 votes
7y

any syndicator that is willing to take $20k in savings from a newbie is not worth working with

there have been numerous threads recently about adding value to syndicators by helping with their pain points

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  • Dan MackinBusiness Member
    Real Estate Agent · Erie, CO · Member since 2014 · 1k+ posts · 512 votes
    7y

    20k is actually plenty to house hack. What sort of hacking do you want to do?

    720-466-3378
    2Reply
  • Steve K.
    Honolulu, HI · Member since 2017 · 247 posts · 315 votes
    7y

    any syndicator that is willing to take $20k in savings from a newbie is not worth working with

    there have been numerous threads recently about adding value to syndicators by helping with their pain points

    10Reply
  • Peter S.
    Attorney · Miami, FL · Member since 2017 · 108 posts · 113 votes
    7y

    I agree with the above post. 20k is certainly alot of money, but not much in the syndication world. I get investors looking to invest with me all the time with similar amount (10k-25k). Unless all the stars align, its tough to really do anything with that sum of money. 

    A house hack would be the way to go. Get in with a low down payment owner occupied home.   

    3Reply
  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    7y

     @Wiley Underwood I am in agreement with all of the above. Most syndicators have threshold of $50K if they are experienced and they are targeting larger projects. Larger project tend to have a higher degree of success.

    I'm sure you can find a newbie syndicator that will take your $20K. You have to be very careful because you don't sound like a "sophisticated investor" (legal term related to your net worth or annual income) so in most case you would need to already know the syndicator. These are all SEC related regulations. 

    You could also go after one of the online portals that their compliance allows them to advertise to the general public.

    The tone of your post seems like you would be inclined to chase returns when in fact you should be seeking safety and preservation of your capital.

    4Reply
  • Eric Schultz
    Investor · San Diego, CA · Member since 2016 · 265 posts · 305 votes
    7y
    Wiey Underwood If you are just looking to get your money working for you while you save up more, self-educate and practice analyzing deals than you may want to consider investing in notes. Something like AHP Servicing will pay 10% preferred return. There are many more note funds out there that are paying 8% - 10% return right now.
    3Reply
  • Oleg Shalumov
    Rental Property Investor · Teaneck, NJ · Member since 2016 · 567 posts · 291 votes
    7y

    @Wiley Underwood I rarely see syndication have $25K for a smaller deals, but you can look for that kind of deals. 

    House-hack would probably be more preferred as it is a best way to start getting into Real Estate, and start saving money as tenants usually cover you mortgage and expenses (specially for 4-plex).

    I see you are in Denver, so 4-plex maybe too expensive - if that is the case, I would looks for an area where the prices are not as high (maybe 30 min or an hour drive from the city) and look for 4-plex there. I would say that after house-hacks, this is the next best way to invest.

    Crowdfunding could be also an option, but I more of a believer that it is better to invest money into an Stock Market Index fund then in crowdfunding.

    DM me is you have any additional questions.

    3Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    there are crowd funders that take as low as 100.00 dollars and no need to be accredeted.. find those and spread your dollars around.. only do stuff with collateral no unsecured lending. 

    and if you dont own a home.. as mentioned by @Dan Mackin  House hack your first one 4 plex is the way to go

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    4Reply
  • Alina Trigub
    Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
    7y

    @Wiley Underwood

    1) Determine your long term RE goals

    2) Start learning on your own through books, podcasts and REI meetup networking

    3) Save up more money in the meantime

    4) When ready financially and educationally take action

    2Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    7y
    Originally posted by @Wiley Underwood:

    Hi guys, 

    I am starting out in real estate investing, and have $20,000 saved for an investment. I live in Denver, Co. and am looking to join a syndication so that I can learn as much as possible. I hope to house hack one day, but don't have the capital. What would you do with only $20,000? 

    -Wiley

     I'd pay down/off any higher interest revolving debt first. Credit cards. Then installment debt like car loans, personal loans, student loans. Risk-free, hassle-free and tax-free investing right there.

    Then I'd save for my househack.  Money market mutual funds like Vanguard and Fidelity pay about 2% while you learn and save more.  

    First rule of investing is don't lose money. - Warren Buffett

    4Reply
  • Matt Millard
    Lewisville, TX · Member since 2015 · 344 posts · 264 votes
    7y

    @Steve K.

    Can you provide link or other way to search the posts you mentioned?

    0Reply
  • Matt Millard
    Lewisville, TX · Member since 2015 · 344 posts · 264 votes
    7y

    @Bill S.

    Sophisticated has no net worth or income requirements just knowledge & experience which everyone measures subjectively.

    Accredited which passed Congress before I was born is $200k annual income or $1 million networth out home & $400k income if married.

    Congress badly needs to update these laws as they have made my syndication career a pain since day one!

    2Reply
  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    7y
    Originally posted by @Wiley Underwood:

    Hi guys, 

    I am starting out in real estate investing, and have $20,000 saved for an investment. I live in Denver, Co. and am looking to join a syndication so that I can learn as much as possible. I hope to house hack one day, but don't have the capital. What would you do with only $20,000? 

    -Wiley

     I know of a few in the Cleveland area.

    0Reply
  • Joshua Lidberg
    Rental Property Investor · Philadelphia, PA · Member since 2016 · 41 posts · 14 votes
    7y

    There would be 2 great options in your circumstances.

    Buying 1-4 units with a low money down loan would be one of them. Just 5% conventional/3.5% FHA can already get you in the game. You can "house hack" the units. You can do the same, but with rooms in each unit, which would earn you more. I see you're in Denver, in your market, you can Airbnb the units/rooms and make significantly more than the former.

    Another option, would be finding an experienced and reputable investor and attempt to work with them. One strategy would be offering a rehabber to loan them their repair costs at a lower percentage than they usually get, and asking to help out and see the process. 

    1Reply
  • Dianna Vonderheide
    Real Estate Broker · Central Coast, CA · Member since 2019 · 15 posts · 10 votes
    7y

    maybe starting with an owner-occ single family home?  Easier to get into with less cash on hand

    1Reply
  • Josh Kredit-Phelps
    Salt Lake City, UT · Member since 2016 · 39 posts · 18 votes
    7y

    I really like what @Alina Trigub said. 

    Figure out your goals and start learning. 

    My partner and I read Long Distance Real Estate Investing by David Greene and it served us well. 3 Current properties and we are about 20k into each of them, so you could easily land one! 

    1Reply
  • Lan Raby
    Member since 2019 · 61 posts · 44 votes
    7y

    @Wiey Underwood. Look into a company called Fundrise, they do REITs and you can also invest in individual apartment projects.

    3Reply
  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    7y

    @Matt Millard thank you for the correction.

    0Reply
  • Charles Kao
    Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
    7y

    @Wiey Underwood

    You suggested two things completely opposite of each other but I would say 20k is plenty to househack. If it were me I would

    househack on a BRRR model

    so you can do both, and have two sources of income not just one. If you invest in a syndication you will be left with no money left

    over to invest and no experience to start your own syndication which is not ideal.

    0Reply
  • Brandon Metzler
    Flipper/Rehabber · Brandon, MS · Member since 2017 · 30 posts · 7 votes
    7y

    @Wiey Underwood

    I think now is the perfect time for house hacking, whether it be renting out a room or getting a duplex. You can definitely do it with $20k.

    0Reply
  • Kristopher HanksPro Member
    Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
    7y

    @Wiley Underwood

    I use Groundfloor for parking my money for the short term. I have earned just over a 10.2% yield on my investments, and the max loan term is 12 months so you can get your money back quickly. Then, when you are ready you have access to your cash to deploy into your first real estate deal. 

    2Reply
  • Dominique Pradel-Lewis
    Investor · Pittsburgh PA · Member since 2018 · 102 posts · 76 votes
    7y

    I believe it's 300k for married couple and if they were to adjust it would be up not down due to inflation.  Be careful what you wish for.

    0Reply
  • Brian Dally
    Lender · Atlanta, GA · Member since 2016 · 24 posts · 61 votes
    7y
    Originally posted by @Lan Raby:

    @Wiey Underwood. Look into a company called Fundrise, they do REITs and you can also invest in individual apartment projects.

    The problem with non-traded REITs is they can pause redemptions at any time which means you can't get your money out. One of my eREITs (Rich Uncle's) recently did this and Fundrise has warned they will too when the market gets tough. This isn't a problem when you invest directly in properties or crowdfunded loans.

    5Reply
  • Wiley Underwood
    OP
    Denver, CO · Member since 2018 · 7 posts · 7 votes
    7y

    @Dan Mackin looking to purchase duplex and up, live in one side and rent out the other! Value add would be ideal.

    0Reply
  • Wiley Underwood
    OP
    Denver, CO · Member since 2018 · 7 posts · 7 votes
    7y

    @Joshua Lidberg thank you! Super helpful. 

    0Reply
  • Lan Raby
    Member since 2019 · 61 posts · 44 votes
    7y
    Originally posted by @Brian Dally:
    Originally posted by @Lan Raby:

    @Wiey Underwood. Look into a company called Fundrise, they do REITs and you can also invest in individual apartment projects.

    The problem with non-traded REITs is they can pause redemptions at any time which means you can't get your money out. One of my eREITs (Rich Uncle's) recently did this and Fundrise has warned they will too when the market gets tough. This isn't a problem when you invest directly in properties or crowdfunded loans.

      Thanks Brian,  I didn't know that... I appreciate the heads up!

    0Reply
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