New investor saving for my first property. Looking for advice.
Member since 2022 · 4 posts · 1 vote
Hey - I'm a newbie to everything real estate. I currently work as a songwriter as well as a bookkeeper for a production company. I started my own bookkeeping company in the last 6 months and have an almost-full roster of clients. My plan is to save 100% of the money I'm making from my bookkeeping biz in the next year and invest it into my first short term rental property. I currently have zero debt (paid it off during covid) other than a car payment, and my living expenses are generally low for living in LA. I live off of my songwriting and production company income currently. My goal is to purchase my first STR out in Joshua Tree and then branch out from there.
I'm looking for advice on how to get started. Are there ways for me to maximize and grow the income I'm making from my business in the meantime, prior to purchasing a house? I've never purchased a house before, but I am determined and want to make this work. I appreciate your time and help!
-Mike
Hey - I'm a newbie to everything real estate. I currently work as a songwriter as well as a bookkeeper for a production company. I started my own bookkeeping company in the last 6 months and have an almost-full roster of clients. My plan is to save 100% of the money I'm making from my bookkeeping biz in the next year and invest it into my first short term rental property. I currently have zero debt (paid it off during covid) other than a car payment, and my living expenses are generally low for living in LA. I live off of my songwriting and production company income currently. My goal is to purchase my first STR out in Joshua Tree and then branch out from there.
I'm looking for advice on how to get started. Are there ways for me to maximize and grow the income I'm making from my business in the meantime, prior to purchasing a house? I've never purchased a house before, but I am determined and want to make this work. I appreciate your time and help!
-Mike
Hey - sounds like you're doing all the right things already. Living expenses low, zero debt, and building a savings. What is your living situation like? Are you able to get a roommate for a year? Do you have a parking space or storage you could rent out? Get a cheaper place to live?
Unfortunately, because of the inflationary climate we're facing, there aren't many safe havens to park your money short-term while earning a nice yield unless you're willing to do things like lend peer to peer but there's higher risk involved there. There are places to park your money in crypto and earn 8-12% but when you cash out, you'll have to pay gains taxes on it and since you're looking at short term, I don't think it would be worth it.
Keep doing what you're doing.
I would stay the course, find ways to cut expenses even more.
Hey - I'm a newbie to everything real estate. I currently work as a songwriter as well as a bookkeeper for a production company. I started my own bookkeeping company in the last 6 months and have an almost-full roster of clients. My plan is to save 100% of the money I'm making from my bookkeeping biz in the next year and invest it into my first short term rental property. I currently have zero debt (paid it off during covid) other than a car payment, and my living expenses are generally low for living in LA. I live off of my songwriting and production company income currently. My goal is to purchase my first STR out in Joshua Tree and then branch out from there.
I'm looking for advice on how to get started. Are there ways for me to maximize and grow the income I'm making from my business in the meantime, prior to purchasing a house? I've never purchased a house before, but I am determined and want to make this work. I appreciate your time and help!
-Mike
Hey - sounds like you're doing all the right things already. Living expenses low, zero debt, and building a savings. What is your living situation like? Are you able to get a roommate for a year? Do you have a parking space or storage you could rent out? Get a cheaper place to live?
Unfortunately, because of the inflationary climate we're facing, there aren't many safe havens to park your money short-term while earning a nice yield unless you're willing to do things like lend peer to peer but there's higher risk involved there. There are places to park your money in crypto and earn 8-12% but when you cash out, you'll have to pay gains taxes on it and since you're looking at short term, I don't think it would be worth it.
Keep doing what you're doing.
I would stay the course, find ways to cut expenses even more.
Thanks so much for your response!
I currently live with my partner and a roommate in a 2br. Our rent is as cheap as it can be for living here which is great (about $1k each).
I'm going to stay the course like you said. Hoping to have enough for a down payment and start-up costs by the end of the year.
I appreciate your time!
Hey - I'm a newbie to everything real estate. I currently work as a songwriter as well as a bookkeeper for a production company. I started my own bookkeeping company in the last 6 months and have an almost-full roster of clients. My plan is to save 100% of the money I'm making from my bookkeeping biz in the next year and invest it into my first short term rental property. I currently have zero debt (paid it off during covid) other than a car payment, and my living expenses are generally low for living in LA. I live off of my songwriting and production company income currently. My goal is to purchase my first STR out in Joshua Tree and then branch out from there.
I'm looking for advice on how to get started. Are there ways for me to maximize and grow the income I'm making from my business in the meantime, prior to purchasing a house? I've never purchased a house before, but I am determined and want to make this work. I appreciate your time and help!
-Mike
Hey - sounds like you're doing all the right things already. Living expenses low, zero debt, and building a savings. What is your living situation like? Are you able to get a roommate for a year? Do you have a parking space or storage you could rent out? Get a cheaper place to live?
Unfortunately, because of the inflationary climate we're facing, there aren't many safe havens to park your money short-term while earning a nice yield unless you're willing to do things like lend peer to peer but there's higher risk involved there. There are places to park your money in crypto and earn 8-12% but when you cash out, you'll have to pay gains taxes on it and since you're looking at short term, I don't think it would be worth it.
Keep doing what you're doing.
I would stay the course, find ways to cut expenses even more.
Thanks so much for your response!
I currently live with my partner and a roommate in a 2br. Our rent is as cheap as it can be for living here which is great (about $1k each).
I'm going to stay the course like you said. Hoping to have enough for a down payment and start-up costs by the end of the year.
I appreciate your time!
Any questions about short-term rentals in Joshua Tree and the high desert, I'm happy to answer them!
Hey - I'm a newbie to everything real estate. I currently work as a songwriter as well as a bookkeeper for a production company. I started my own bookkeeping company in the last 6 months and have an almost-full roster of clients. My plan is to save 100% of the money I'm making from my bookkeeping biz in the next year and invest it into my first short term rental property. I currently have zero debt (paid it off during covid) other than a car payment, and my living expenses are generally low for living in LA. I live off of my songwriting and production company income currently. My goal is to purchase my first STR out in Joshua Tree and then branch out from there.
I'm looking for advice on how to get started. Are there ways for me to maximize and grow the income I'm making from my business in the meantime, prior to purchasing a house? I've never purchased a house before, but I am determined and want to make this work. I appreciate your time and help!
-Mike
Mike, have you read Set for Life? Great book that seems like a lot would apply to your current situation in terms of making those first steps. You mention no debt but then a car payment, I now LA and you've got to have a car but do you have options to get rid of that car and/or payment? As for maximizing your funds, as is mentioned a lot in Set for Life, you need to really look at the dollars you're spending, not the small stuff at Starbucks or that type of stuff but the big tickets items like your car payment and see how you can minimize your expenses. Then stick all those funds away where you can't touch them. Yes, stating the obvious but so many people fail with this. I'm currently putting every last penny away in Betterment saving for a down payment on our first investment property and while the market has been stinking lately, it'll still be far ahead of the pennies I'd earn in a regular savings account over the next 18-24 months I project I'll need to have enough funds for my investing plan.
I will echo what everyone has said. If you want to wait to save for that first investment, great , follow that path.
Something to consider that may be less expensive and will give you great experience is:
Rent arbitrage (check my spelling): Go out and look for an landlord that will be willing to air B and B their rental. Either rent it yourself or ask them if they would be willing to go 50/50 with you. They get first what they would rent it for : say $2k and you guys split the profits after monthly expenses (utilities, food, toiletries etc )
This will be inexpensive to start: maybe $5k to $10k if you partner with them. You will get a ton of experience without committing to the purchase. and you will see if this is really what you want to get into. It’s not for everyone…
If and when successful, then start the second one and third one or save faster for your down payment and closing costs for your own property.
I know some people (real people) making between $8k to $15k per month with this strategy without owning any homes.
I am bias in that, I preach for people to buy homes and build wealth but I also believe in business and being creative!
Once you are ready to buy: you could go for a fixer, renovate it, add value, add the ADU and start building your empire. It takes time, but once you get to your 2nd or 3rd home, you will start building momentum.
Good luck
Thank you all so much for your input. I'm going to research all of this and also check out that book Set for Life. Appreciate you all!
I second getting into a house hack first. As a first time home buyer who will be owner occupying the space, you can put as little at 3% down. Ideally look for something with an ADU, rental basement or a room or two that you can rent out to roommates (even on Airbnb). Don't worry it's just for the first year.
This will help you supercharge your savings to buy the next place. Look for the 10% down second home loan in Joshua Tree. I have a great lender if you need some help navigating products.
Hi Michael,
My husband and I have one of our STRs out in Joshua Tree and we've been getting some great returns. If you have any questions and would like to chat, I'd love to help out in any way I can.