I am new to real estate investment. What real estate product and market would you suggest to invest $30K I can take from a HELOC?
@Marc Dufour Your best bet would probably be to look into wholesaling, as it requires the least amount of cash. What about your personal interest?
What is wholesaling exactly?
How about buy and old market where I can invest $30K and get $1k rent per month?
Depending on the area your in, you may want to try and look for mobile/manufactured homes, they are cheap and bring really good rents. Or do a lease/own option on them, where you can have the tenant/buyer, put a nice down payment down to recoup some of the purchasing cost.
Check out the middle of the country.
@James Wise... whom I don't seem to be connected to... always has a number of deals going on in the Cleveland OH area. They are generally a bit more than 30k, but not much. Most of his duplexes seem to bring in 1000-1100/month.
I started with $30K HELOC and some equity in my home. I think you could get a hard money loan and make a purchase in the 60K range, rehab it for another $20K to $30K and have a house worth $120K. A hard money lender will give you a deal like this. Deals like this are certainly available in the Cleveland burbs. After you have it rented, you can go to Dollar Bank and they'll give you 70% of your investment, so if you have put in $30 of your own, plus $70 of the hard money lender, you could then refi with Dollar for $70K. You now have $70K go go buy another house. You do have to some experience with construction for this work.
@Marc Dufour Most of my investments are in Cleveland. You can buy turn key duplexes in Cleveland OH for $30,000 to $35,000 and they will generate a gross monthly rent of $1,000.00+ per month. Feel free to contact me with any questions about the Cleveland market
I saw someone mentioned reaching out to @James Wise, we are in the same market place. I have not had an opportunity to work with him on anything yet but I'm sure he is a solid guy as he is all over the forums!
Hi @Marc Dufour
There's properties out there that with $30K you can buy for cash but I wouldn't recommend anything in that price range for a new investor, especially one that would be buying out of state. They look good on paper, but you're not going to get quality tenants. You can count on high vacancies and turn over costs. Personally, I would use $30K from the HELOC as down payment for 2 properties in the $60K range and finance the rest. You can use the HELOC as a down payment and since it's not on the properties you're financing, it's not considered in your loan to value. This spreads your risk out over a couple of higher quality properties and give you more cash flow. I'd be happy to talk further if you'd like.
That would be enough to flip with, especially with a hard money lender unless you're in an expensive market. I would say either flipping or wholesaling (or perhaps both)
In the 30k range anything renting for more than $800 Is going to be a low income duplex.
I own low income duplexes they are not in war zones & they make money but they do come with additional headaches as @Mike D'Arrigo has said.
30-40k SFR renting between 700-800 are a lot less work. Tenant class will be higher.
$50-65k SFR that rent around 900-1k are great for the out of state beginner. Almost no surprises with those.
All the above asset classes make money but don't expect the Ritz with an accountant as your tenant if your looking to buy cheapest possible houses.
I agree with what @James Wise is saying. Especially about low income duplexes for $800. As James say's duplexes can be tricky but when they're in high crime war zones, they can be a downright disaster. I don't recommend duplexes to inexperienced investors. Leave them to the pro's.
I am not sure about San Francisco - may be there are areas that are 90 minutes drive away from San Francisco where 30k can be a down payment for a duplex or a good SFR. In Dallas metro where I invest, I would buy a duplex with this money as down payment and lease them out - better cash flow than a SFR and you are positioned better to avoid 0 or 100% vacancy situation that you have with a SFR.
There many areas to pay in cash with that amount, my last one was 12.5k for a cbs house I know someone who just paid approx 18k for a cbs houseIf you are a new investor, it would be a good idea to buy one and pay cash, then as you are learning the ropes of landlording, and dealing with vacancies, you do not have to deal with the risk of defaulting on your mortgageit would just be a much more stress free experience
I am not sure if you can find any deals in san fran at that price... In other areas $30k could get you solid brick homes or duplexes with rental amounts ranging from $550-$800... I have never seen a $30k investment renting for $1k...
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