New investor - to start building a passive income of 5,000$/month

6 Replies

I am new to BP and new to investing in real estate. I have saved a bit of cash and am looking to buy my first property to rent out - my goal is to build a real estate portfolio that builds my passive income to 5,000$/ month. I live in Israel and I think the best option is to build a rental portfolio, although I am always open to new ideas. 

What I want to know is where is the best to start off? If I am able to put down a down payment of 20% on a 1,250,000$ property or even to buy a few properties is that better than buying something for cheaper and paying out the mortgage faster? Or should I start with a different type of investing in real estate altogether? 

I really appreciate everyones help!

It depends on what you want to do paying down a mortgage faster will increase cash flow in the near term but will slow down overall growth, it is up to you how you want to proceed.

I agree with Aaron that it is really up to you how you proceed.  However, I would start with low hanging fruit (Acquire cheap, fix and Hold), until I build a portfolio with equity.  

Remember to keep your business credit purchases and your personal apart from each other to prevent limiting you buying power through high DTI ratios.

If you are new to rental property investing I would pick up The Book On Rental Property Investing, by Brandon Turner from Bigger Pockets. Having an excellent educational foundation is the only way to start. Ask questions as many as you can before investing. Learn what not to do and avoid the pitfalls that many investors looking to jump into the market make. Until you have read this book twice or even three times I would not invest a dime. That's the best advice I can give you.

First step is to educate yourself on finances and leverage. This is key to making decisions.

Second, and as important, do not think of real estate investing as creating a passive income. It's a job, a big job, that takes a considerable amount of ongoing time and effort. If you want passive put you money in a income fund. Real estate investing is work. Take your eye off the ball and it can go bad very quickly.

Originally posted by @Barak Shachnovitz :

I am new to BP and new to investing in real estate. I have saved a bit of cash and am looking to buy my first property to rent out - my goal is to build a real estate portfolio that builds my passive income to 5,000$/ month. I live in Israel and I think the best option is to build a rental portfolio, although I am always open to new ideas. 

What I want to know is where is the best to start off? If I am able to put down a down payment of 20% on a 1,250,000$ property or even to buy a few properties is that better than buying something for cheaper and paying out the mortgage faster? Or should I start with a different type of investing in real estate altogether? 

I really appreciate everyones help!

 Start with baby steps, need to crawl before you walk

A good start is to source properties where you can add value

Network with investors who are already doing this and piggy back . Find out if there are meet ups in your area.

My monthly income has gone from negative income to close to $20,000 per month, my strategy has taken some tweaking over time

Pay attention to market condotions, find markets that are rising this will help you get there quicker, investing on steroids:)

All the best