Not sure where to start.. how much to invest

Buying & Selling Real Estate
5yFollow

Not sure where to start.. how much to invest

Elena Fabri
Member since 2020 · 6 posts · 3 votes

I live in Los Angeles, and Ellena home with a rental on it. I have probably $100,000 cash available (heloc)  for my first investment.  The rental property could cover my house mortgage, however I’m using it to pay down heloc debt. I don’t know which type of property to start with, I don’t want to house Htach, but I would like to purchase a second property for rental. Whether it a condo or a duplex. But I feel afraid to make the first step and I’m not sure how to prioritize my goals. I have a demanding job but can make time for refurbishment‘s I have quite a design flair which is why my rental property does so well. Where should I get started? Right now I’m deep into the Podcasts whenever I have a spare time. But know that There will be opportunity in the  coming months that I should prepare for now. What are the best types of property for my situation and how should I determine? 

0Reply
14 views

5 Replies

Jump to latestLatest
  • Mark H. Porter
    Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
    5y

    Your $100g gives you $400k of buying power with a 75% LTV. What you buy depends on what you can get for that amount of money. If maxing cash flow is a priority, get as many doors as you can with that while staying under 4 so you can get better financing. There are so many "it depends" on this - where you want to buy? What is the growth rate now or projected? Will you have time to manage it yourself? Are you looking for something you can fix up and max the rents? There are tons of things for you to decide.

    0Reply
  • Andy EakesPro Member
    Property Manager · San Diego, CA · Member since 2020 · 205 posts · 162 votes
    5y

    @Elena Fabri Do you plan to purchase this next deal through the MLS? If so, I would find an investor minded agent. If you listen to the podcasts and love BP, I would find an agent who is active on here. Just so you two are on the same page. An investor minded agent can find the deals for you, that way you can still manage your busy life. They'll find some good properties when they come up (sometimes before they hit the market) and then you can come in and do the analyzing, and ultimately make a decision. But if you can nail down what type of property you want, how much you can afford (pre-approval letters recommended), and where you are interested, you have a much clearer path.

    0Reply
  • Jon Schwartz
    Realtor · Los Angeles, CA · Member since 2018 · 952 posts · 1k+ votes
    5y
    Originally posted by @Elena Fabri:

    I live in Los Angeles, and Ellena home with a rental on it. I have probably $100,000 cash available (heloc)  for my first investment.  The rental property could cover my house mortgage, however I’m using it to pay down heloc debt. I don’t know which type of property to start with, I don’t want to house Htach, but I would like to purchase a second property for rental. Whether it a condo or a duplex. But I feel afraid to make the first step and I’m not sure how to prioritize my goals. I have a demanding job but can make time for refurbishment‘s I have quite a design flair which is why my rental property does so well. Where should I get started? Right now I’m deep into the Podcasts whenever I have a spare time. But know that There will be opportunity in the  coming months that I should prepare for now. What are the best types of property for my situation and how should I determine? 

    Elena,

    I second the above commenter's recommendation about connecting with a local, investment-minded agent!

    I think the first step is to clarify your goals. LA's an expensive market, and even $100K limits your options for an investment property because you'll be required to put at least 20% down -- and most likely 25%.

    So I think the biggest question is: what exactly are you aiming to achieve with this next investment? What role does your investment portfolio play in your financial life five years down the road?

    Once you have that nailed down, then it's a question of doing the math on possible deals and finding the best submarket for appreciation and/or cashflow.

    All the best,

    Jon

    0Reply
  • Elena Fabri
    OP
    Member since 2020 · 6 posts · 3 votes
    4y

    Guys, I wanted to thank you for the insights. I have advanced my position and am not under contract for my first duplex out of state. It meets the 1% rule and the cost was low enough that I did not deplete my savings. I am able to leave 6 months in reserves for my primary budget as well as 6 months for the property I purchases. This allows me some breathing room as I move to my next deal. I am thinking a refurb in order to build up some capital. with rates increasing I need to be mindful as less people will be willing/able to buy. Any suggestions what types of markets will always be a buyers market? Not locations, but things to look for in areas you want to flip?

    0Reply
  • Darius Nunez
    Rental Property Investor · Queens, NY · Member since 2021 · 35 posts · 6 votes
    4y

    @Elena Fabri the great thing about real estate is there are always deals to be had. People get flinchy during these types of uncertainty and lots of volatility! I currently invest out of state getting small multi family properties under management generating great monthly cash flow. Feel free to inbox me and we can talk more!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free