Wholesaler/ Investor · Houston, TX · Member since 2014 · 491 posts · 113 votes
Hello everyone. One of my best friends is wanting to do something smart with his money but has no time for anything since he is a full-time student at LSU and has a demanding job. He lives in Baton Rouge and I'm here in Houston. He literally asks me every other day "What are we gonna do man?". Honestly, I really don't know what all options are out there. He is willing to put up about 15k-16k and I could probably come up with about 4 or 5k. Since he is in Louisiana and I'm here in Houston of course I would be the one doing everything pretty much.
Any ideas on what we could do?
The only real estate experience I have is purchasing three vacant lots from an auction and selling them to three other individuals. I'm currently in the beginning stages of wholesaling, searching for that first deal.
I just don't want to miss the opportunity he has put out there? Any insight would be great.
Investor · Jacksonville, FL · Member since 2015 · 504 posts · 217 votes
10y
Your friend will have more risk than you do..Do you both have any back up income to purchase like a student duplex near a college from an out of state or owner finance owner/ motivated seller? I say back up income so you may add value and resell, or rent? Have you thought through each other's expectations on cash flow, time expected to work it and get a return?
I did have a very easy time dividing 5 perfect acres into 5-1 acre lots and selling them all by owner financing, and took the profit and bought commercial vacant land that I later sold for much more. But your friend may not want to wait on a return. Land has been alot less work and headache than renovating and landlording but Land has to be in the right place and the right kind to divide. My lots were in an up and coming rural town with its first new grocery store. It had alot of dirt roads that are paved now.. It sold very fast. People love the simplicity of owner financing.
Investor · Charlotte, NC · Member since 2016 · 374 posts · 189 votes
10y
I'd spend some of that money learning zero down deals and marketing for zero down deals. $20k isn't that much unless you know how to use it. I could purchase a pretty run down house, renovate it myself (maybe even live in it) and rent it out for $500-$700 a month.
Investor · Jacksonville, FL · Member since 2015 · 504 posts · 217 votes
10y
Your friend will have more risk than you do..Do you both have any back up income to purchase like a student duplex near a college from an out of state or owner finance owner/ motivated seller? I say back up income so you may add value and resell, or rent? Have you thought through each other's expectations on cash flow, time expected to work it and get a return?
I did have a very easy time dividing 5 perfect acres into 5-1 acre lots and selling them all by owner financing, and took the profit and bought commercial vacant land that I later sold for much more. But your friend may not want to wait on a return. Land has been alot less work and headache than renovating and landlording but Land has to be in the right place and the right kind to divide. My lots were in an up and coming rural town with its first new grocery store. It had alot of dirt roads that are paved now.. It sold very fast. People love the simplicity of owner financing.
Investor · Houston, TX · Member since 2015 · 97 posts · 25 votes
10y
Hey Benjamin. It's great you have a partner.
First and foremost educate yourself. If you read my profile you will notice I didn't and It's an education but better if you learned from other peoples mistakes. Tell your partner that don't just jump in to any deal because your partner is anxious. Keep reading the forums, If you find a deal analyze the numbers, post it on here. I'm new but I have noticed alot of people come together and help out when you ask questions about a deal. I hope you the best in your real estate endeavors!
Houston, TX · Member since 2015 · 512 posts · 338 votes
10y
You can flip mobile homes for 20K as a Lonnie Dealer. As others have stated every real estate strategy can be very specialized and you need to know what you're doing otherwise will blow your budget quickly. Don't make your first deal your last.
Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
10y
20K is a great start. It is a start though. Definitely don't get into something if you are stretching the accounts and have zero reserves. Build that bank while you learn, make contacts, and hunt deals. As the money builds, you will eventually find the right deal and will have a better financial situation where you can invest with more stability. We were all eager to get going in the beginning. Sometimes the best investment is the one that you do not make.
Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
10y
If your friend has a big student debt I would pay that puppy down first .Then he will have a bigger hammer to save money ,and if caught in a jam will not have to sale .
Wholesaler/ Investor · Houston, TX · Member since 2014 · 491 posts · 113 votes
10y
Hey @Account Closed thanks a lot.
Hey @Carolyn MoralesWe definitely do not have back up funds at the moment. We both aren't really looking for any immediate return at all. Just want to get our money working for us.
I definitely agree with you about educating myself and learning from other's mistakes. I will relay the message to him about not jumping into things as well. Thanks a lot for the tips.
Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
10y
Originally posted by @Account Closed:
I'd spend some of that money learning zero down deals and marketing for zero down deals. $20k isn't that much unless you know how to use it. I could purchase a pretty run down house, renovate it myself (maybe even live in it) and rent it out for $500-$700 a month.
Investor · Boise, ID · Member since 2014 · 174 posts · 51 votes
10y
I would say to save up another 20k before you start investing. You need to be able to protect your investment from being blind sided with expenses that you don't plan for. You have to be able to play defense once you buy your first investment.