What to do with $20k

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What to do with $20k

Braeden Henry
Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes

I have $20k, how should I throw that money into real estate to make more than $20k in a short amount of time?

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Karl B.
Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
6y

What I did with my first multi-family deal was buy a 4-unit for $79,000. 

I put 25% down (roughly $20,000) and got a loan for the rest. 

The place was half-vacant and needed some work, much of which I performed myself to keep the rehab cost low.

It's fully-occupied now - I've owned it for 3.5 years and I'm getting almost $2,000 in combined rent per month and my 10 year mortgage (property taxes and insurance baked in) is $874-something per month and so I'm cash flowing well after paying the minor expenses such as the water/sewer bill and the lawn care.

Look for a similar deal (where you buy a property at around $80,000) that has good cash flow. 

I'm cash flowing roughly 20K on the property in two year's time which I consider a short amount of time. Plus the loan only has another 6.5 years until it's paid off and I'm cash flowing even more. 

You're in a good area - find a good cash flowing property!

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  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y
    Originally posted by @Robert Ellis:
    Originally posted by @Braeden Henry:

    I have $20k, how should I throw that money into real estate to make more than $20k in a short amount of time?

    Welcome! owner occupy a prop with low downpayment or house hack is easiest start, or do a duplex under 80k. easy use to it. you can find doubles in decent shape with that amount, 20% down. i can refer you to a lender if you need one in columbus 

     A lot of banks have 6% conventional products to purchase doubles here in Columbus, Ohio

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  • Braeden Henry
    OP
    Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes
    6y

    @Karl B. You found a great deal, thanks for the feedback!

    1Reply
  • Braeden Henry
    OP
    Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes
    6y

    @CJ M. Thank you for the feedback!

    1Reply
  • Braeden Henry
    OP
    Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes
    6y

    @Brian Gerlach I was thinking this would be a good starting place.

    0Reply
  • Braeden Henry
    OP
    Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes
    6y

    @Mike Bartuseck I like the OSU area to invest. Thanks for the feedback!

    0Reply
  • Braeden Henry
    OP
    Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes
    6y

    @Matthew Porcaro I was thinking doing that and getting roommates to offset the mortgage.

    1Reply
  • Braeden Henry
    OP
    Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes
    6y

    @Remington Lyman I was thinking this route to build up more cash and real estate knowledge. Good to talk again!

    1Reply
  • Braeden Henry
    OP
    Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes
    6y

    @Christopher Winkler I was thinking this route to get some knowledge and not have as much reliability.

    0Reply
  • Braeden Henry
    OP
    Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes
    6y

    @Robert Ellis good to speak again! Would you mind referring me some good lenders in Columbus, thanks!

    0Reply
  • Christopher Winkler
    Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
    6y
    Originally posted by @Braeden Henry:

    @Christopher Winkler I was thinking this route to get some knowledge and not have as much reliability.

    Find your local REIA and start networking that way is a great way to learn more and meet local people who can help in different ways. They are also good to bounce deals off to get their opinion if is good or a dud.

    0Reply
  • Braeden Henry
    OP
    Rental Property Investor · Columbus, OH · Member since 2019 · 50 posts · 32 votes
    6y

    @Christopher Winkler good idea, thanks for the help!

    0Reply
  • Ujwal Velagapudi
    Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes
    6y

    Like some others have said, I would go for a house hack/house hack + flip/flip and use your $20k as downpayment and some rehab costs. Or a small partnership where you pool in funds with an active partner if you wish to be more passive. Or you could buy some small notes. 

    My first investment in RE was a 3 unit retail strip I bought outright for $20k cash, back in 2014 in Detroit. I sold that building for $77k, and in the few years of ownership had net a total of ~$65k from cash flow on it. 

    0Reply
  • Brian Nguyen
    Member since 2020 · 18 posts · 4 votes
    6y

    @Joe Cassandra what do you mean by sub2?

    0Reply
  • Brian Nguyen
    Member since 2020 · 18 posts · 4 votes
    6y

    @Ujwal Velagapudi can you tell me more about this please ? Is it it hard to find those types of retail strips for $20k? How long did you hold until you sold it ?

    0Reply
  • Erin Dorsey RobinsonPro Member
    Real Estate Agent · Cleveland, OH · Member since 2020 · 280 posts · 365 votes
    6y

    @CJ M. Credit has to be a consideration for this approach in this market, wouldn’t you say? The banks are increasing their credit scores and stopping refi loans all together in many cases. It may not be as easy to do for the time being. But if he has stellar credit, we’ll above 700 I’d say, this could still be an option. But things are changing daily, so it’s risky. I’ve had a few deals fall through because the terms changed before the credit application was made.

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  • Account Closed
    Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    @Erin Dorsey Robinson

    Yes, agreed, credit is always a factor when dealing with banks and lenders. Fingers-crossed, but thus far I have not seen much. If any changes in my area to credit score requirements, or refi's in general (I was just approved by 3 banks for a cash-out refi). But to clarify, I'm referring to portfolio loans.

    1Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    6y
    Originally posted by @Braeden Henry:

    @Robert Ellis good to speak again! Would you mind referring me some good lenders in Columbus, thanks!

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  • Ujwal Velagapudi
    Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes
    6y

    @Brian Nguyen Yes, it's probably close to impossible now, especially for cash outright in the condition (decent) that I had purchased it in. It was a former owner occupant seller who was looking to divest his assets as he was well into his retirement, and I was just able to negotiate it down. It was a great deal then, especially with 2/3 units being already occupied, cash flowing, corner section of a block on a very busy street, and a solid brick building with no major capex requirements. I held for 5 years.  

    But just saying $20k wasn't too small of a number to start with, even just a few years ago in particular markets. The market has risen in recent years, but there are still other creative ways to get into RE with $20k like many of the posters here are sharing. 

    0Reply
  • Joshawn McFadden
    Flipper/Rehabber · Saint Louis, MO · Member since 2020 · 12 posts · 2 votes
    6y

    @Braeden Henry Brrrr it an where are you from

    0Reply
  • Kurt PhillipsPro Member
    Realtor · Lancaster, OH · Member since 2017 · 163 posts · 120 votes
    6y

    @Braeden Henry focus on learning as much as you possibly can about creative financing.    Youtube and BP are great but there is nothing like networking like crazy to learn from real life people that are doing it.  Read anything you can get your hands, be willing to invest in courses that you truly believe will add knowledge, and in some cases if you encounter someone you trust that offers coaching take them up on it.  

    $20K is will be gone quick.  But if you can do a creative deal and bring little to no money to the table then you will be set up with cash in your pocket and your first deal in the books.  Good Luck. 

    0Reply
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