Rental Property Investor · Columbus, OH (columbus oh) · Member since 2020 · 65 posts · 71 votes
What do you recommend for short term savings?
I’ve been a bit timid with purchasing my first investment property. Analysis paralysis makes me hesitant at this time with interest rates what they are and anticipating a recession. I don’t want to be too speculative of how the recession will impact the real estate market, but IF there’s more inventory available and IF there are more buying opportunities to find deals (or even time the market for stock investments) I want to be ready.
So how do I prepare my finances?
When saving cash, we hear about inflation and losing value in cash. Part of me wants to turn to my brokerage accounts but that’s essentially a gamble.
How are others preparing their money for potential purchases to come? What finance vehicles or methods are you using?
This is a great question and really depends on your timeline.
If you think you're unsure to the point where you'll sit our for a while you'll probably want to put your money safer, longer-term investments.
If you're thinking about jumping in soon you might want to keep that cash on hand or in assets that can easily be liquidated to be able to make the move when the time comes.
You can consider some higher risk/reward investments based on your comfort but I'd recommend minimizing the percentage of your portfolio you expose to those asset classes.
@Jaron Walling yeah I think that’s where I get hesitant. I want something I can add value to but not something I have to rely on contractors before it’s livable, ya know?
@Tracy Keffer you’re right about making offers. Transparently, that’s something I’ve never done!
I hadn’t thought about investing networking/events for investors. I appreciate the offer! :)
I need to dig into the bigger pockets community more to find a mentor or something to help me through my first deal! That would be ideal but not sure how to go about that without asking directly.
@Alex Wise, also because of the increased inventory in most markets due to"regular" homebuyers no longer in the market to buy, higher interest rates can be off set by motivated sellers accepting below listing prices, paying for closing costs, and paying for points to provide the buyer a loser rate. This is the time to buy.
@Alex Breshears I agree with your comment. Curious... how long did you work for the private money lender?
Creating those connections with contractors is important. After remodeling the majority of 2 properties I'm slowly leaning heavy into hiring out more work. It's physically impossible to complete everything in a timely fashion. I've been recommending a few contractors we used in the past and we're finally coming around full circle and hiring them again. It's exciting when people take you serious, respond to calls/texts, and projects get done quickly.
@Michael Deering smart! Yeah I think I've been trying to find something I can add value too. Sorta BRRRR but then I'm always uncertain of multi-family vs single family.
It's all cash-flow against your risk tolerance. SFH - low risk, low returns; MF more risk, more returns
another vote for buying now, especially with inflation money, is losing value rapidly. However, in places like Columbus Ohio, properties are appreciating hand over fist.
@Alex Breshears I agree with your comment. Curious... how long did you work for the private money lender?
Creating those connections with contractors is important. After remodeling the majority of 2 properties I'm slowly leaning heavy into hiring out more work. It's physically impossible to complete everything in a timely fashion. I've been recommending a few contractors we used in the past and we're finally coming around full circle and hiring them again. It's exciting when people take you serious, respond to calls/texts, and projects get done quickly.
I worked for the private lender for about 2.5 years, then transitioned to the conventional side, and then eventually out of the mortgage process altogether after I got a job post-grad school. I really learned a lot from both of those experiences, stuff I still use to this day and those jobs were almost 20 years ago lol.