I am currently working a full time job but I would really like to start dipping my toes into real estate investment to eventually quit my full time job. I am a total beginner and looking to start with $25k capital for an investment next year. What do you all recommend under these circumstances.... buying a rental for some cash flow, buying a house to flip and resell, investing in others who are looking for capital, etc.
I am in my early 30s and no kids so I’m not afraid of a little risk if I’ll end up learning through the process as well.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
5y
As a total beginner, set your $25K to the side for a minute. There will be people who will convince you they have a magic $25K training course for you, lol. You need basic education first. In today's world, this basic education is free just like public school, lol. There are all sorts of topics, articles you can search right here on BP. There are countless podcasts for beginners in real estate investing. There are tons of books. Find the person in your local area who is in the business and find a way to bring something to them they need in exchange for what you want. You gotta get a good foundation and education of the niches in real estate to figure where you think you want to go. Other people will never be able to tell you for certain what path is best for you. As for that $25K, once you get some basic education some of that is going toward your marketing. And I am not ruling out advanced training either after you have solid foundation for free.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
5y
As a total beginner, set your $25K to the side for a minute. There will be people who will convince you they have a magic $25K training course for you, lol. You need basic education first. In today's world, this basic education is free just like public school, lol. There are all sorts of topics, articles you can search right here on BP. There are countless podcasts for beginners in real estate investing. There are tons of books. Find the person in your local area who is in the business and find a way to bring something to them they need in exchange for what you want. You gotta get a good foundation and education of the niches in real estate to figure where you think you want to go. Other people will never be able to tell you for certain what path is best for you. As for that $25K, once you get some basic education some of that is going toward your marketing. And I am not ruling out advanced training either after you have solid foundation for free.
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
5y
Kiara,
As a new investor and already having a good jump on saving $25K. You have a good opportunity to use your cash reserves wisely. One thing I always recommend is getting a bank/lender to give you a pre-qualification for a loan using either part or all of the $25K for the DP. Keeping in mind you will still have other costs closing costs/renovations/money set aside for loss rent/repairs etc. You can circumvent certain costs like closing costs by negotiating seller concession where the seller pays for a portion up to 2% of sales price on investment property. Buy a home that does not require a lot of renovations mostly TLC. Pre-screen renters check credit and employment secure 1st/last/security deposit.
But getting approved for financing is a good start so that you can calculate your total costs and know your purchase price range.
Specialist · Plano, TX · Member since 2020 · 2k+ posts · 861 votes
5y
If your wish is to keep your full-time job, at least for some time, you should consider becoming a limited partner on apartment syndications. There is no landlord experience required and it doesn't take up your time. @Kiara Conde
Rental Property Investor · OH (ohio) · Member since 2018 · 166 posts · 113 votes
5y
@Kiara Conde
Would you consider “house hacking”? It could be a great introduction into being a landlord and real estate, if you don’t mind living close to a tenant. It’s also not as risky as a flip or straight rental. A duplex is perfect for it if you can get prequalified and find one cheap enough, live in half and use the other to pay your mortgage. That’s generally seems to be the safest bet here for how to learn and build some wealth at the same time. What are your goals with real estate? Why do you want to get involved with it?
San Diego, CA · Member since 2013 · 37 posts · 14 votes
5y
@Kiara Conde Dear Kiara, please allow me to ask you some questions rather than answering your questions.
First of all great job on saving the money. Second of all itis amazing that you are thinking about taking care of your future (I woke up at age 34 :) ). Any-who here are questions for you:
1) what are your short/long term goals?
2) what are your skills level than it comes to rei?
3) are you looking for cashflow and/or appreciation?
4) do you want to invest locally or not.
5) what level of education do you have in regards to rei?
6) do you have a mentor?
7) do you know someone who already accomplished what you are trying to accomplish? If so see if you can connect with him/her.
Hopefully by answering my questions you get some clarity on what you might do with 25K.
Please remember that no one cares about your money as you do.
Happy to connect with you if you need more guidance.
Regards,
Levi - A W2 investor in pursue of cashflow 💵
P.S: some ideas what can be done with 25K - use as downpayment for an investment property; start a short term business; become a passive investor in someone else's deal...
Attorney · Austin, TX · Member since 2014 · 888 posts · 759 votes
5y
Put it away and don't tell anyone you have it. Join local clubs, groups, etc. and talk to other local investors. When we start doing in-person, meet them in the flesh. Figure out your own goals, pick the RE tool that will get you there (or non-RE if that's the case).
Take $2-3K and sample a few training sessions (1-3 day seminars). Despite the sales pitch, you don't need to drop $10-20K on "mentoring" from a "guru". Each seminar will pitch a next, more expensive, program. This is called a sales funnel. Jokingly or not, 80% of these programs can be found for free on youtube, podcasts, or <$200 from Half-Priced Books.
When you figured you out, find a local person doing what you want to do and see if you can "jv" on one of their deals with some of your money.