San Diego, CA · Member since 2017 · 5 posts · 1 vote
Hello!
I am currently active duty military. I was recently injured on my last deployment and I am going to be receiving a $50,000 insurance pay out here in the next 3 weeks.
I own a house in Southern California and I have absolutely $0 debt besides my house.
My goal is to build enough residual income off of real estate in order to supplement the $3,000 a month I'll get from my disability check every month. My goal would be to be making a total of $10,000 a month so I need to add $7,000 a month in passive income.
I know $50,000 isn't a lot but how can I use that money to kick off my real estate investing? Thanks everyone!
Investor · Scottsdale, AZ · Member since 2016 · 1k+ posts · 885 votes
9y
@Daniel Wise First, thank you for your service. Secondly, you could use the insurance proceeds and buy using Subject To and wind up with a lot more properties than a conventional approach. I'd suggest buying in communities where prices are more reasonable than San Diego. If you are able to drive it will make things easier, but you can still arm chair invest as well. Let me know if I can give you any pointers.
San Diego, CA · Member since 2017 · 5 posts · 1 vote
9y
Hello Ken,
Thank you so much for the reply! I am VERY interested in starting to invest using the "subject to" model and just keep my 50K as cash flow to get me started in case I have a vacancy for a couple months or a few repairs. I would prefer to do this in the Southern California market although I am willing to go elsewhere. I am familiar with "subject to" but there is no way I could do my first couple deals by myself, I would definitely need a mentor or someone with your extensive experience to get me going. From what I've read it seems like the hardest part about this model is finding sellers willing to sell you the property "subject to", would you agree with that? Also, I read that the best way to protect yourself from the bank calling the note due it to place the real estate in a land trust, is this correct? Thanks for your time!
I think you are very wise for sticking to your guns about investing in SD. Since you're military, you'll have VA entitlement that I would absolutely recommend utilizing for your first 2-4 unit acquisition.
With VA, you can get 100% financing on such purchases.
That $50k would work perfectly to cover the renovation budget as well as make sure you have the necessary reserves.
Please feel free to reach out if you'd like any assistance with your property search. I am always happy to help!