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Karliz Ramirez
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In need of advice

Karliz Ramirez
Posted Jan 31 2024, 21:16

Hello guys, I'm brand new in the investing world, but I'm trying to learn and educate myselfas much as I can.

I have a question or several: I currently work, I have a w2, and almost 20k saved. I rent an apartment and I'm approved for 275k for an FHA loan. Then I met An investor recently and he offered me the opportunity to invest with him in some flips that he is doing or that he might have coming up.

With the FHA I'll be putting the money as a 3% down payment and I'll rent rooms (house hacking) or with the investor I'll invest the money with a hard money loan going 50/50 with this guy. Honestly, I don't know which route to take whether to invest the money in a flip with that guy or get an FHA loan on my own and get a house since no matter what I need to find a place to live (either renting like I do or a house) or should I take the risk and do both or simply neither of the two. 😬 thanks for answering.

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Nicholas L.
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Nicholas L.
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#5 Starting Out Contributor
  • Flipper/Rehabber
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Replied Feb 1 2024, 02:10

I don't believe that brand new investors should serve as lenders

It's also extremely odd that an established investor would want money from someone who has never invested before...

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Glen Wiley
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  • Richmond, VA
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Glen Wiley
  • Investor
  • Richmond, VA
Replied Feb 1 2024, 02:45

Spend a few years learning the industry before you invest with someone. There is a lot to learn to ensure you don't get ripped off (and even then there is a risk).

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Matthew Paul#2 Contractors Contributor
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Matthew Paul#2 Contractors Contributor
  • Severna Park, MD
Replied Feb 1 2024, 04:10

Slow down , I would first cover your own living arrangements and buy your first property . Get some roommates , thats a start . Your first house isnt your last house . As you progress leverage the first property to get the second . Having $20,000 wont last you long if things dont go just right . 

With zero experience , you DONT want to partner with anyone . If things go south , there are 2 people and 1 life vest and neither of you can swim . 

Slow and steady wins the race . 

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Corby Goade
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Corby Goade
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Replied Feb 1 2024, 05:12
Quote from @Karliz Ramirez:

Hello guys, I'm brand new in the investing world, but I'm trying to learn and educate myselfas much as I can.

I have a question or several: I currently work, I have a w2, and almost 20k saved. I rent an apartment and I'm approved for 275k for an FHA loan. Then I met An investor recently and he offered me the opportunity to invest with him in some flips that he is doing or that he might have coming up.

With the FHA I'll be putting the money as a 3% down payment and I'll rent rooms (house hacking) or with the investor I'll invest the money with a hard money loan going 50/50 with this guy. Honestly, I don't know which route to take whether to invest the money in a flip with that guy or get an FHA loan on my own and get a house since no matter what I need to find a place to live (either renting like I do or a house) or should I take the risk and do both or simply neither of the two. 😬 thanks for answering.


 I agree with the other responses- lending isn't a great place to start- it's complicated, risky and requires deep market knowledge to not be taken advantage of. 

On the flip side- an FHA house hack is the BEST way to start. Get a roommate, hopefully a property that needs some cosmetic love, even better if it's a small MFH.

Rinse and repeat every couple of years, slowly build some equity, cash flow, knowledge, experience and relationships and then you can do bigger, and more unique things. 

Best of luck!

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Wyatt Wolff
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  • Lender
  • Charlotte, NC
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Wyatt Wolff
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  • Lender
  • Charlotte, NC
Replied Feb 1 2024, 08:05

Pretty much the same as above. Do the househack first. You have more control, and you can literally SEE what your money is doing. 

Lending is a great avenue to explore when you don't NEED the money. 

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Karliz Ramirez
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Karliz Ramirez
Replied Feb 1 2024, 09:25

I appreciate your response. I'm definitely going to look into house hacking first. Than you! 

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Byron Valles
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Byron Valles
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Replied Feb 7 2024, 18:30

I agree with what most have already said. 

Also, keep in mind that there are potential tax benefits related to investing in your primary home. Depending on your specific situation, they may or may not apply. 

Whereas any income you get from lending your money would be taxed as ordinary income. Ordinary income is usually less ideal from a tax perspective for folks whose primary source of income is W2.  

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Replied Feb 19 2024, 05:33
Quote from @Karliz Ramirez:

Hello guys, I'm brand new in the investing world, but I'm trying to learn and educate myselfas much as I can.

I have a question or several: I currently work, I have a w2, and almost 20k saved. I rent an apartment and I'm approved for 275k for an FHA loan. Then I met An investor recently and he offered me the opportunity to invest with him in some flips that he is doing or that he might have coming up.

With the FHA I'll be putting the money as a 3% down payment and I'll rent rooms (house hacking) or with the investor I'll invest the money with a hard money loan going 50/50 with this guy. Honestly, I don't know which route to take whether to invest the money in a flip with that guy or get an FHA loan on my own and get a house since no matter what I need to find a place to live (either renting like I do or a house) or should I take the risk and do both or simply neither of the two. 😬 thanks for answering.




Absolutely agree with the previous advices here - not to jump into lending but start with house hacking, which in my mind, is an excellent entry point into real estate investing. It allows you to buy a property with a smaller down payment since you'll be living in it as your primary residence. This lowers the barrier to entry, making real estate investing more accessible for those with limited funds.
Another super important topic there is that house hacking offers several tax benefits that can reduce your overall tax burden. Expenses related to maintenance, repairs, and improvements on the property may be tax-deductible. Additionally, you can claim depreciation on the portion of the property used for rental purposes. Please consult your CPA on this - you can really save a great deal on all of this things that you are entitled to
And lastly, probably the most valuable thing you will get out of house hacking - your experience. You'll gain valuable insights into being a landlord, property management, and tenant relations, and preparing you up for success in future real estate ventures!

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Michael Smythe
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Michael Smythe
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Replied Feb 19 2024, 10:35

@Karliz Ramirez how much do you know about investment private lending?

Do you even know what forms to use to protect yourself?

Also, when it comes to money, TRUST NO ONE!

People with integrity will NOT be offended to put everything in writing to protect both parties.

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Paul Merriwether
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Paul Merriwether
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Replied Feb 19 2024, 17:52

@Karliz Ramirez  Go to Amazon get Scott Jelinek's Slow Flip. 

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Crystal Smith
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Crystal Smith
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ModeratorReplied Feb 20 2024, 03:42
Quote from @Karliz Ramirez:

Hello guys, I'm brand new in the investing world, but I'm trying to learn and educate myselfas much as I can.

I have a question or several: I currently work, I have a w2, and almost 20k saved. I rent an apartment and I'm approved for 275k for an FHA loan. Then I met An investor recently and he offered me the opportunity to invest with him in some flips that he is doing or that he might have coming up.

With the FHA I'll be putting the money as a 3% down payment and I'll rent rooms (house hacking) or with the investor I'll invest the money with a hard money loan going 50/50 with this guy. Honestly, I don't know which route to take whether to invest the money in a flip with that guy or get an FHA loan on my own and get a house since no matter what I need to find a place to live (either renting like I do or a house) or should I take the risk and do both or simply neither of the two. 😬 thanks for answering.


 I'm going to go against the grain of the advice you've been given thus far of not going with the investor on a house flip  Why?  You haven't given us any information about the investor.  While purchasing a home and renting rooms is nice- you learn absolutely nothing about evaluating an investment opportunity; vetting a potential partner, understanding what it takes to do a successful flip......  

In my opinion, your next step should be researching the investor who has asked you to invest. Check on their previous projects. If they don't have any experience are they working with someone with experience? Research how to put together a Joint Venture Agreement or find an attorney who would be able to act on your behalf. Take time to understand the numbers associated with the project. The acquisition price, the renovation cost, the projected ARV, the impact of the days on the market on the profit........ I'm not advising you to invest with this person but use it as an opportunity to learn what you cannot learn by just purchasing a home using FHA and renting out the rooms.

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