Real Estate Agent · Phoenix, AZ · Member since 2020 · 74 posts · 58 votes
How much money did you have saved up before buying your first investment? I had saved up 45k, and then used 20k of that for my first deal. I am trying to decide if I should leave the rest in mutual funds, or use it for my next deal.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
If that is all you have left it is probably time to beef up savings again, because you need reserves for your property as well as an emergency fund for yourself.
PS mutual funds in general kinda suck due to the high fees, I'd look into ETFs and save yourself the management fees every year. "Financial advisors" recommend mutual funds because they get commissions from selling them.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
If that is all you have left it is probably time to beef up savings again, because you need reserves for your property as well as an emergency fund for yourself.
PS mutual funds in general kinda suck due to the high fees, I'd look into ETFs and save yourself the management fees every year. "Financial advisors" recommend mutual funds because they get commissions from selling them.
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
6y
Some good advice from @Aaron K. . You could also research REITs. You can invest in them no different than stocks or bonds. When I started out I had enough for a low down payment, rehab, and emergency fund. I started swinging hammers and adding value on a distressed SFH.
Hi!
I had about 70k saved for my first investment property (I made my old house a rental when I moved, so technically I already owned the rental and bought myself a new house). That dropped my savings down to about 18K after down payment and closing costs.
My rule of thumb is to keep about 4-6 months of expenses saved in a mutual fund(vanguard S&P 500). That is total expense; my own expenses for my life plus cost of rental if it was vacant. I keep throwing money into that account every month. Once it grows big enough, I buy the next rental and start over again.
Hoping to buy the next rental before the end of the year, and plan on just continuing to do this until I can buy an island somewhere :)