Is 20K enough? Interested in Remote Rental Properties

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Is 20K enough? Interested in Remote Rental Properties

Gawaine O'Gilvie
Member since 2021 路 10 posts 路 12 votes

Hey All!

I'm excited to get into rental properties but not sure where to start. I'm currently reading a book by Brandon Turner (and browsing Bigger Pockets). For the markets that I'm interested I live nowhere near any of them. Also looking for areas with properties that are geared towards cashflow.

I'm hoping to have enough money saved up to get started by the end of the year or early 2022.

Real estate markets I'm interested:

  • Detroit, MI (and surrounding cities)
  • Raleigh, NC (and surrounding cities)
  • Ohio
  • Arkansas
  • Illinois

I'm also open to other cities. I currently have 20K saved up exclusively for investing/real estate. I might be able to save up to $50K this year. Would that be enough to get me started ?

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Greg Pawluk
New to Real Estate 路 Greater Raleigh 路 Member since 2021 路 26 posts 路 21 votes
5y

I can only speak for Raleigh area.... you will be hard pressed to find something in Wake County for less than 200k, without at least some rehab or capital improvements.  Since you're doing remote, it's an investment, and most lenders are requiring 25% down.  So on 200k house that's 50k right there...without any additional rehab/upgrading/closing costs.  Most homes in this market, depending on price point, are selling 15-50k over asking price right now. No to say with some extensive searching you wont find some.... but if you're looking to minimize upfront costs to get in the game, look in areas like Winston Salem, Fayetteville, Smithfield/Selma, where you can still buy a property for $125k.  Just my perspective, but I'm not pro.

Good work on saving!  

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  • Paul Dante Pronio
    New to Real Estate 路 New York Tri-State 路 Member since 2021 路 13 posts 路 3 votes
    5y

    @Jonathan Pavkov

    This is a great site I鈥檓 new here and love the positive energy and camaraderie. I hope to some day work with some of you and share valuable helpful info.

    馃檶馃徏

    0Reply
  • Ryan Blackstone
    Real Estate Broker 路 Fayetteville, AR 路 Member since 2017 路 375 posts 路 240 votes
    5y

    @Paul Dante Pronio Lets do it. 

    1Reply
  • Yoann Dorat
    Investor 路 Boca Raton FL 路 Member since 2017 路 255 posts 路 188 votes
    5y

    @Gawaine O'Gilvie within Detroit it鈥檚 gonna be mostly cash but in the suburbs you can get financing.

    1Reply
  • Rebekah Hitt
    Rental Property Investor 路 Member since 2021 路 48 posts 路 17 votes
    5y

    Let me know if you are interested in NW Arkansas. I have connections in the industry and have some insights because I live in the area.

    0Reply
  • Christie Duffy
    Real Estate Agent 路 North Jersey 路 Member since 2016 路 76 posts 路 29 votes
    5y

    @Gawaine O'Gilvie -- I'd learn your market first! I've invested close to home and far away and your going to take your lumps either way so I think its great to learn your market and find the deals available to you, then expand. There are so many investors in Boston finding deals! Right? Maybe try the suburbs if you are looking for a lower point of entry! I live 30 min from Manhattan and so real estate values here are also definitely higher but I've purchased multiple deals right here for 250k or below. I bought a flip for 157k, as one example. A two-family for 225k. These were on market deals. Really dig in and make sure youre seeing all the low priced deals coming on in your market. You'll know when a good deal hits. Don't forget it's all relative, meaning if every house in a particular town sells for $200k - its no longer a deal at this price. In that town, you'd want to get a house for $100k, etc. But you'll only know a discounted property when you see one by studying the market and watching what comes on and running comps, over and over. Go see houses and practicing analyzing deals and making offers! Good luck.

    1Reply
  • Drew SygitBusiness Member
    Property Manager 路 Royal Oak, MI 路 Member since 2012 路 12k+ posts 路 9k+ votes
    5y

    @Gawaine O'Gilvie 

    We've had several clients purchase properties with mortgages in the City of Detroit, so it can be done!

    You just have to understand the rules are a bit different.

    Since sales prices in many areas vary greatly, appraised values are probably the #1 challenge and drive most of the other problems.

    Most lenders also won't do loans under $50k, some $75k. Assuming a lender requires 25% down for an investment property loan, you're looking at a minimum purchase price of $67k.

    [email protected]248-209-6824
    Logical Property Management4.9458 Reviews
    WebsiteView Page
    1Reply
  • Antonio CuccinielloPro Member
    Investor 路 Austin, TX 路 Member since 2016 路 531 posts 路 310 votes
    5y

    @Gawaine O'Gilvie This is exactly how I felt when I started. I was living in NYC (where cash flow is super difficult for beginners) and I had some money but not a ton, reading Brandon's book.

    The challenge with a lot of the books out there is that they leave you overwhelmed. 

    I actually just did a road trip from Jersey to Texas and visited a ton of markets and learned alot by going there, but it really just confirmed most of the information I learned by doing online research.

    20K might be a enough, depending on the house and what market you get into. 

    Here's how you figure it out:

    1. Find the median home price in an area.

    2. Multiply that by .3 (25% down for down payment and then 5% for closing costs totals 30%)

    3. Add any money for rehab (this could be zero if you get a currently rented out property that doesn't need much fixing)

    So with that formula, you will likely have enough for a house 66K. 

    There are plenty of markets I saw with houses around that price to start. 

    732-402-6988
    1Reply
  • Drew Brown
    Property Manager 路 Lansing, MI 路 Member since 2015 路 170 posts 路 59 votes
    5y

    @Gawaine O'Gilvie yes you could start investing in a couple Markets in MI with $50,000. You may be able work with a local lender to leverage your cash on hand. I would be happy to discuss what is available in MI and answer and questions you may have.

    1Reply
  • Zeke Liston
    Real Estate Agent 路 Columbus, OH 路 Member since 2018 路 1k+ posts 路 1k+ votes
    5y
    Originally posted by @Gawaine O'Gilvie:

    Hey All!

    I'm excited to get into rental properties but not sure where to start. I'm currently reading a book by Brandon Turner (and browsing Bigger Pockets). For the markets that I'm interested I live nowhere near any of them. Also looking for areas with properties that are geared towards cashflow.

    I'm hoping to have enough money saved up to get started by the end of the year or early 2022.

    Real estate markets I'm interested:

    • Detroit, MI (and surrounding cities)
    • Raleigh, NC (and surrounding cities)
    • Ohio
    • Arkansas
    • Illinois

    I'm also open to other cities. I currently have 20K saved up exclusively for investing/real estate. I might be able to save up to $50K this year. Would that be enough to get me started ?

     Hi Gawaine, $50K is likely where you'll want to be to invest in the Ohio market. You can find a good duplex in the $150-$200K range here in Columbus. 

    1Reply
  • Gawaine O'Gilvie
    OP
    Member since 2021 路 10 posts 路 12 votes
    5y
    Originally posted by @Christie Duffy:

    @Gawaine O'Gilvie -- I'd learn your market first! I've invested close to home and far away and your going to take your lumps either way so I think its great to learn your market and find the deals available to you, then expand. There are so many investors in Boston finding deals! Right? Maybe try the suburbs if you are looking for a lower point of entry! I live 30 min from Manhattan and so real estate values here are also definitely higher but I've purchased multiple deals right here for 250k or below. I bought a flip for 157k, as one example. A two-family for 225k. These were on market deals. Really dig in and make sure youre seeing all the low priced deals coming on in your market. You'll know when a good deal hits. Don't forget it's all relative, meaning if every house in a particular town sells for $200k - its no longer a deal at this price. In that town, you'd want to get a house for $100k, etc. But you'll only know a discounted property when you see one by studying the market and watching what comes on and running comps, over and over. Go see houses and practicing analyzing deals and making offers! Good luck.

    Hey @Christie Duffy,

    Thanks for sharing this experience, it's really helping me learn. I'm looking out into the suburbs and other nearby towns as you suggested. I'll keep practicing the analysis.

    0Reply
  • Gawaine O'Gilvie
    OP
    Member since 2021 路 10 posts 路 12 votes
    5y
    Originally posted by @Antonio Cucciniello:

    @Gawaine O'Gilvie This is exactly how I felt when I started. I was living in NYC (where cash flow is super difficult for beginners) and I had some money but not a ton, reading Brandon's book.

    The challenge with a lot of the books out there is that they leave you overwhelmed. 

    I actually just did a road trip from Jersey to Texas and visited a ton of markets and learned alot by going there, but it really just confirmed most of the information I learned by doing online research.

    20K might be a enough, depending on the house and what market you get into. 

    Here's how you figure it out:

    1. Find the median home price in an area.

    2. Multiply that by .3 (25% down for down payment and then 5% for closing costs totals 30%)

    3. Add any money for rehab (this could be zero if you get a currently rented out property that doesn't need much fixing)

    So with that formula, you will likely have enough for a house 66K. 

    There are plenty of markets I saw with houses around that price to start. 

    @Antonio Cucciniello, Yes! All this learning is overwhelming. I appreciate the steps you listed, updated my spreadsheet with your info!

    1Reply
  • Rj Lindemann
    Real Estate Agent 路 Newton, IL 路 Member since 2020 路 19 posts 路 22 votes
    5y

    It depends on what part of Illinois you invest in. I currently have two properties that I purchased with 20k, putting 20% down on both. But I am in the southern, more rural part of Illinois. In Chicago, 20k will be a lot harder to work with.

    0Reply
  • Leo Croes
    Contractor 路 Raleigh, NC 路 Member since 2021 路 15 posts 路 6 votes
    5y

    Local here in Raleigh. We've seen a huge rise in housing prices over the past year in the Triangle area. Will be hard pressed to find anything in Wake County that will fit that budget but Durham County still has lots of great deals to be had and a much faster appreciate rate potential. I would look at Durham first if I were in your position. 

    0Reply
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