Small Business, Low Income & No W2 - Where To Next?

Question

My GF and I own a growing online fitness business that is currently breaking even. Our goal over the next 90 days is to take on a cash flowing asset to start paying off our biggest liabilities. Growing my business is our biggest priority but RE is a hobby that I work on after hours and can't wait to get started on. I'd love some ideas on how others got started in a similar situation!

Mike Dymski · Answer

One or both of you may need to get a job; otherwise, financing is an issue.  You can purchase properties using owner financing or private capital but that's a job as well and many private lenders/investors will expect a track record.  Investing in real estate with limited capital/borrowing capacity is an uphill battle.

Frank Hinck · Answer

@Joseph Cameron

1 SFH cash flowing $200 month isn’t exactly going to help you pay down debts, it has to be understood as a long term investment.  You’ll want to set aside for CapEx, property mgmt and Emergencies in your monthly after PITI, and really have 6 months of mortgage saved up before starting to take cash out.   USVI or long distance is tough to start with before knowing how to be an owner, especially if you don’t have a strong network in the city you buy

Zachary Ray · Answer

@Marc Rice is right, lower the rent and you will be saving a ton! Cut down as many expenses as you can and you will be good to go. Full speed into the business.

Marc Rice · Answer

@Joseph Cameron

Partner with someone on a low money down owner occupied multi family 2-4 unit. Eliminate your biggest expense (rent) and start to build equity with your partner

Ryan Howell · Answer

You can't buy your way out of debts/liabilities.  I would suggest getting rid of liabilities and focus on making your business profitable and reduce expenses first, then you'll be well positioned to start buying assets.  You need the stable foundation.  That said, if you can combine investing with reducing expenses via house hacking in some way that is a win/win (if you're renting or paying a large mortgage on a personal residence, selling to get into a duplex and use the rent to offset your mortgage, helps your balance sheet and your budget).

Matt Groth · Answer

Buying a rental to subsidize a break even business doesn't make a whole lot of sense. Getting business 1 profitable first, before piling on more.

Joseph Cameron · Answer

@Frank Hinck

Agreed on all fronts and thank you for the feedback. We are building a network out here and getting to know the lay of the land - vastly different from the mainland. I am aware of the funds needed to get started. This would be a short term rental in our case but I know many of the same principles would still apply. The idea that it would start paying off our liabilities is simply a start - I know 1 door isn't going to cut it. However, getting started is my goal!

Joseph Cameron · Answer

@Mike Dymski

Appreciate the feedback. I'm no stranger to uphill battles but I see where you're coming from. Have you ever lent on anyone and taken a leap of faith in that regard? I've also actually come across a great owner financed deal here in the USVI recently, how would you approach?

Small Business, Low Income & No W2 - Where To Next?

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