$45k saved at 25! Should I buy multi?

New to Real Estate · Staten Island, NY · Member since 2021 · 26 posts · 26 votes

Hello All! Looking for some advice!!

My girlfriend and I are both 25 years old, we have a little over $45k saved up together, It’s been a dream of mine to invest into Real Estate. We want to get engaged and get married In 2 years then buy a house. If it was up to me, I’d really like to find a duplex or 4+ multi family unit and start our portfolio now.. But we’re not sure if we should start it now or wait till the big events happen first. I just don’t wanna keep pushing real estate off, I want to dive In already..

Also, is $45k even enough to invest? Thanks y’all!

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Dave PoeppelmeierBusiness Member

Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes

@Michael Cavitolo Yes, great to hear that you want to start investing. I will echo what others in this thread have said: Try to house hack a duplex farther away from where you currently live if your 45k will be enough for a down payment on a duplex or buy a fixer-upper FHA with your $45k, live in it a year, find a new one, rent out the old one. The other option would be to find properties in markets like Ohio, where here in Toledo you can get a nice duplex that cash flows well for $100k.

But the other thing that concerns me is you and your girlfriend have $45k saved. Before you two buy anything, she needs to be The One and fully committed with you in this investment journey. The last thing you want to do is have the courts decide who has to pay out who if you guys split. If you insist on proceeding, I would set up an LLC that clearly outlines how you two would exit the partnership if things don't work out. Not trying to be Debbie Downer, but I've seen it happen before.

You're on the right track though, I wish I was doing this at 25! Good luck!

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Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
4y
Congratulations on saving up 45k this is enough money for a down payment. I would recommend you to house-hack and take action when the opportunity comes your way.
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Travis Frenchak
Investor · Butler, PA · Member since 2014 · 130 posts · 114 votes
4y
Absolutely not. Girlfriend? That will end badly. Keep saving and wait until youre married.
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Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
4y
Yes yes yes! the more unit multi the better! HOUSE HACK
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Alex Gurvitz
Lender · Brooklyn, NY · Member since 2015 · 42 posts · 37 votes
4y
Congrats on your savings at such a young age! $45K is certainly enough to invest into a potential fix and flip or a fix and hold. It all depends on the location and the purchase price. Most lenders will require that you have at least 10-15% of the purchase price to do a Rehab Loan (depending on your credit and experience), or at least 20% down in order to obtain a 30 year mortgage. I would suggest that if you can find a lucrative deal, that requires minimal cost of improvements, and a good resale value, then do take advantage of it. Best of luck to you Michael!
0 Reply
Kevin C.
Real Estate Broker · Anchorage, AK · Member since 2012 · 89 posts · 77 votes
4y
Househack! Start with a nice little duplex for a couple of years and go from there. Congrats to you and the gf!
0 Reply
Judy Parker
Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
4y
Originally posted by @Dave Poeppelmeier:
@Michael Cavitolo Yes, great to hear that you want to start investing.
But the other thing that concerns me is you and your girlfriend have $45k saved. Before you two buy anything, she needs to be The One and fully committed with you in this investment journey. The last thing you want to do is have the courts decide who has to pay out who if you guys split. If you insist on proceeding, I would set up an LLC that clearly outlines how you two would exit the partnership if things don't work out. Not trying to be Debbie Downer, but I've seen it happen before.
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I am glad someone else said the same thing I was going to say. And I would highly recommend NOT getting married and DO NOT have kids. Not only will you lose everything (including all of your real estate holdings) in divorce court, you will be responsible for alimony and child support for a very long time. It has happened to just about every guy I know. The wives financially ruined them. Prenups are useless, especially if kids are involved.

If you want to buy real estate, either buy it in your own name, or an LLC, but do not get married.

And Staten Island is way too expensive. Try Rockland County, Haverstraw, NY, Highland Falls, NY. Much more affordable up there.
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Michael Cavitolo
OP
New to Real Estate · Staten Island, NY · Member since 2021 · 26 posts · 26 votes
4y
@Travis Frenchak @Judy Parker Fiancé* lol!
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Tony Freeman
Real Estate Agent · Chicago, IL · Member since 2021 · 27 posts · 39 votes
4y
Hey Mike! That's amazing that you are being so proactive at 25 and looking to invest. Definitely something I wish I would have done at 25. I can't speak to you about the New York market and what you can get for your money out there since I'm in Chicago but I do think $45K is a healthy amount saved up for your first multi-unit. With putting 3.5% down with FHA, I'd say you'd want to probably cap your amount at around $750-800K because you also have to take into consideration your other closing costs. Also, you'd want to stay at 4 units and under because once you get to 5 units, that's when the building is considered a commercial building which you then would have to get a commercial loan and that is minimum 25% down. Hope this helped a little!
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Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
4y
Congrats and yes! Look into a 4 unit (these are my favorite for cashlfow) using FHA loan at low down. I wouldn't wait as you will be spending money on rent so buying a property typically lowers your expenses not increases them, maybe avoid doing a big rehab project though, etc. find something instead good shape.
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Travis Frenchak
Investor · Butler, PA · Member since 2014 · 130 posts · 114 votes
4y
Originally posted by @Michael Cavitolo:
@Travis Frenchak @Judy Parker Fiancé* lol!

Still not married. You can invest with just your name but it sounds like its not all your money. I get it youre engaged and in love but life changes pretty quick sometimes.
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Eric JansonBusiness Member
Real Estate Agent · Minneapolis, MN · Member since 2015 · 102 posts · 100 votes
4y
I currently represent a couple where they bought a duplex and lived in it for a year and now they are looking to buy another one to live in for a year and continue this process. They do this because they are able to get a better loan that works for them. They have a good chunk of money to work from, similar to you, but they are making it last longer and buying more properties with it. This is what I would suggest. Your money will go much further. If you are going to buy a rental and not live it, you may need 20-25% down, plus closing costs. Your $45k will get eaten up pretty quickly.
Also, they are doing this now before they have kids. They plan on buying a place to settle down in eventually and then start a family.
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Michael Cavitolo
OP
New to Real Estate · Staten Island, NY · Member since 2021 · 26 posts · 26 votes
4y
@Eric Janson that's great and really smart!!
0 Reply
Monique Pett
Rental Property Investor · Denver · Member since 2020 · 80 posts · 33 votes
4y
Hi!
Congrats on the savings.
you have a few different options, but be aware, i know you think that girlfriends stay but I would never jointly invest with my boyfriend.
1. You could house hack, put a tad down and rehab the other units.
2. You could use hard money, fund your first BRRRRRRR or flip and then either sell or cash out refi.
I;d try to get as many properties as possible. I think it is more than doable with $45k.
There is also a DSCR loan (the acronyms are escaping me ) where if you put a renter in that property and it cashflows, you're good to go.
Wishing you the best of luck. :)
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Dave PoeppelmeierBusiness Member
Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
4y
Originally posted by @Judy Parker:
Originally posted by @Dave Poeppelmeier:
@Michael Cavitolo Yes, great to hear that you want to start investing.
But the other thing that concerns me is you and your girlfriend have $45k saved. Before you two buy anything, she needs to be The One and fully committed with you in this investment journey. The last thing you want to do is have the courts decide who has to pay out who if you guys split. If you insist on proceeding, I would set up an LLC that clearly outlines how you two would exit the partnership if things don't work out. Not trying to be Debbie Downer, but I've seen it happen before.
---------------------------------------------------------

I am glad someone else said the same thing I was going to say. And I would highly recommend NOT getting married and DO NOT have kids. Not only will you lose everything (including all of your real estate holdings) in divorce court, you will be responsible for alimony and child support for a very long time. It has happened to just about every guy I know. The wives financially ruined them. Prenups are useless, especially if kids are involved.

If you want to buy real estate, either buy it in your own name, or an LLC, but do not get married.

And Staten Island is way too expensive. Try Rockland County, Haverstraw, NY, Highland Falls, NY. Much more affordable up there.

Michael, I am very happily married, and my wife is completely on board with our RE Investment strategy. We have 3 fantastic kids, and are still investing. If your goal is to take over the RE world, then maybe a family isn't the best move right now. But if your goal is to get some passive income rolling that can progress to Financial Independence, then the extra income that 2 earners can bring in will help you get started much easier. Yes, kids are "expensive", but what do you and your fiancé have in mind regarding a family? These are absolutely conversations you need to have now. Hit RE hard for 5 years, work hard at your jobs to get a house per year with your FHA loan as well as saving the money in fixing up houses yourself, finding other houses to get with conventional financing, and THEN have kids? That sounds like a plan to me.

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Steve Miklashevskiy
Real Estate Agent · Hillsdale, NJ · Member since 2020 · 87 posts · 39 votes
4y
@Steven Harris why are you trying to start with a quad if you feel having $100k saved up may be too tight?
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Brenden MitchumBusiness Member
Rental Property Investor · Atlanta, GA · Member since 2019 · 1k+ posts · 872 votes
4y
@Steven Harris I did pretty much exactly what you did but back in 2019 (and from Hawaii)..My "nest egg" also proved to be a lot less effective than I'd planned. Upon realizing this, my mindset changed from "find that first investment asap" to "take it slow and learn everything you can about the market." I also decided to focus on income and these new focuses led me to get my license. Eventually, (1 year after I moved out here) I snagged my first property - a house hack. To some, this may look like a year of piddling around but it taught me so much about real estate and the Atlanta market since I was completely surrounded by it 24/7.
My point is that it does take time to invest effectively, especially when you come to a new market. Don't worry about this time but instead enjoy it and learn as much as you can. Also, great plan to get a job soon - income is a big piece of the puzzle that many gloss over. Unless you want to be full-time in the world of RE, having solid income is key. And the powerful strategy of house hacking is most accessible with w-2 income.
Lastly, be prepared to get creative and do things others aren't. This isn't to say make bad investment decisions or reinvent the wheel. However, in a competitive market, you will want to find a way to go around the competition, rather than through it. Work smarter, not harder.
Remember, I'm always happy to help in any way I can. Reach out anytime!
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Craig Janet
Member since 2019 · 223 posts · 261 votes
4y
So you are willing to buy a property and sign a 30 year mortgage together but not ready to be married? Either wait until your married or have a ironclad partnership agreement.
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Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
4y
Originally posted by @Michael Cavitolo:
Hello All! Looking for some advice!!

My girlfriend and I are both 25 years old, we have a little over $45k saved up together, It’s been a dream of mine to invest into Real Estate. We want to get engaged and get married In 2 years then buy a house. If it was up to me, I’d really like to find a duplex or 4+ multi family unit and start our portfolio now.. But we’re not sure if we should start it now or wait till the big events happen first. I just don’t wanna keep pushing real estate off, I want to dive In already..

Also, is $45k even enough to invest? Thanks y’all!

When I got started investing my sophomore year of college, I had $500 to my name, My grandmother lent me $12k for the downpayment on a duplex on OSU campus in Columbus. Over the course of a year my wife and I fixed it up, rented to friends, ate peanut butter and jelly, did everything we could. We then refinanced the property and it has given us $140k in cash back and continually produces $1,800/month in cash flow.

Get started and it will be only good things for your future!

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Michael Cavitolo
OP
New to Real Estate · Staten Island, NY · Member since 2021 · 26 posts · 26 votes
4y
@Steven Foster Wilson thats amazing Steven!!
1 Reply
Crystal SmithPro Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
4y
Originally posted by @Michael Cavitolo:
Hello All! Looking for some advice!!

My girlfriend and I are both 25 years old, we have a little over $45k saved up together, It’s been a dream of mine to invest into Real Estate. We want to get engaged and get married In 2 years then buy a house. If it was up to me, I’d really like to find a duplex or 4+ multi family unit and start our portfolio now.. But we’re not sure if we should start it now or wait till the big events happen first. I just don’t wanna keep pushing real estate off, I want to dive In already..

Also, is $45k even enough to invest? Thanks y’all!
I don't think you should wait. Best way to get started is to start to gather data to answer your question: "Is $45K enough to invest". Looks like you're in the NYC market. Very expensive but while I have family there I don't really know the market. First thing I'd do is talk to some lenders to find out how much and what kind of loan you would qualify for. Look at owner occupied and non owner occupied loans. The hire realtor(s); maybe one for each boro; and get an idea how much you'll really need to do business in that area. Finally start finding some investment clubs with wholesalers who may have some deals. Use the time between now and 2 years from now (your marriage) to either get smarter on your market or to pull the trigger on a deal.

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Joseph Hammel
Rental Property Investor · Lake Hallie, WI · Member since 2015 · 292 posts · 144 votes
4y
More doors per property is where the cash flow is at. Best of luck on the investing!
1 Reply
Steven Harris
New to Real Estate · Atlanta · Member since 2021 · 38 posts · 17 votes
4y
@Steve Miklashevskiy, Mainly because I want a rental income generating property, not just a SFR. With my price point of no more than $280k, I've noticed a few quads for sale for less than $300k with tenants already in place. I'd buy it using an FHA 203k (most likely)with plans to update anything that's "quick & easy" to do, like new cabinets & counter tops or new washers/dryers without using up every cent of my cash on hand.
Paying 3-3.5% down on a duplex, tri or quad that could already have tenants in place while I live in one of the units, for me, is the best and smartest move for a first time home buyer and REI newbie🤷🏻‍♂️
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Barbara Wilson-Scranton
Eads, CO · Member since 2021 · 23 posts · 7 votes
4y
Have you looked into an economic development organization for funding. Lower interest rates and lower down payment. At least that is my experience so far.
0 Reply
Steven Harris
New to Real Estate · Atlanta · Member since 2021 · 38 posts · 17 votes
4y
@Steve Miklashevskiy, Mainly because I want a rental income generating property, not just a SFR. With my price point of no more than $280k, I've noticed a few quads for sale for less than $300k with tenants already in place. I'd buy it using an FHA 203k (most likely)with plans to update anything that's "quick & easy" to do, like new cabinets & counter tops or new washers/dryers without using up every cent of my cash on hand.

Paying 3-3.5% down on a duplex, tri or quad that could already have tenants in place while I live in one of the units, for me, is the best and smartest move for a first time home buyer and REI newbie🤷🏻‍♂️
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Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
4y
@Michael Cavitolo you should use an FHA loan to buy a multifamily and house hack.
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