Best Beginner Strategy

Philadelphia · Member since 2019 · 9 posts · 2 votes

I've read over the intial guide for entering real estate, chapter 3 discusses some of the strategies. I'm still unsure which would be best for me. I'm looking for some help, or direction? I'm starting with roughly 150k cash in hand, What ways would be the most reliable to get on path to generate 4k a month NET profit? I'm looking to leave my 9-5 and do something in realestate as my primary source of income.

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Raphael Collazo

Real Estate Agent · Louisville, KY · Member since 2016 · 183 posts · 188 votes

I second the "house-hacking" suggestions. According to a recently published "Business Insider" article, the average American spends close to 35% of their household income on housing. If you were to purchase a duplex, triplex or quadplex and rent out the other units, you could potentially eliminate this expense entirely. This would help reduce the money you need to achieve financial independence closer to $2,500-3,000 per month instead of $4,000. Along with that, since you'd be living in the property, you would qualify for "owner-occupant" financing which would reduce your down payment to as little as 3.5% (FHA).

I bought a quadplex in November 2018 and I've been house hacking it ever since. The rents from the other tenants ($1,830 per month) are enough to cover my mortgage, taxes and insurance payment for the property ($1,750 per month). I plan on using this same strategy in 2020. It's a repeatable process that could help you achieve financial independence in the next 5-7 years. Hope this helps.

All the best,

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Kathy Henley
Rental Property Investor · St. Louis, MO · Member since 2014 · 741 posts · 424 votes
6y
Welcome @James Bradley. Investing can generate income, yes. The how is not one answer. You could lend your money to others or you might want to buy and manage yourself. You might benefit from listening to podcasts on Bigger Pockets to hear trials and errors of an investor summed up in 60 minutes. Or you could attend local real estate group in you area, if you want to invest locally. I was inspired by the book, 'Duplexes, Tripexes and Quads' about multifamily investing.
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Gerald Pitts
Lender · Asheville NC · Member since 2016 · 469 posts · 317 votes
6y
Recent BP podcast episode house hacking may inspire you. It's a very low risk entry point, and good way to learn landlording. Can do FHA loan on up to 4 unit multifamily. A live in flip is another way to learn. I recommend a cosmetic, light flip, if possible. Also recommend feasting on a ton of free podcast episodes. Have fun!
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Michael Carbonare
Investor · Fort Lauderdale, FL · Member since 2013 · 917 posts · 606 votes
6y
@James Bradley There isn't any one best way. You'll need to make a determination what strategy is a fit for your financial abilities and your investor psyche. A common issue for many new investors is paralysis of analysis. Wanting to know everything before you do anything. The result? A year from now you're still watching podcasts, chasing the latest shiny object. Settle on one strategy, James, and run with it. For me it was and remains various types of lease options.
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Jeremy TaggartBusiness Member
Real Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 646 votes
6y
@James Bradley House hack if you can and the rest just keep BRRRRing
DHRE- The Jeremy Taggart Team590 Reviews
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Raphael Collazo
Real Estate Agent · Louisville, KY · Member since 2016 · 183 posts · 188 votes
6y
I second the "house-hacking" suggestions. According to a recently published "Business Insider" article, the average American spends close to 35% of their household income on housing. If you were to purchase a duplex, triplex or quadplex and rent out the other units, you could potentially eliminate this expense entirely. This would help reduce the money you need to achieve financial independence closer to $2,500-3,000 per month instead of $4,000. Along with that, since you'd be living in the property, you would qualify for "owner-occupant" financing which would reduce your down payment to as little as 3.5% (FHA).
I bought a quadplex in November 2018 and I've been house hacking it ever since. The rents from the other tenants ($1,830 per month) are enough to cover my mortgage, taxes and insurance payment for the property ($1,750 per month). I plan on using this same strategy in 2020. It's a repeatable process that could help you achieve financial independence in the next 5-7 years. Hope this helps.
All the best,
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