Looking to invest 20k in a multi family, anywhere in US.

19 Replies

I have 20k to invest into real estate. I was hoping to get my hands on a 2bd per unit, 3 unit, rental property. If I only have 20k to Invest where should I be looking? I looked in Jacksonville ATL Raleigh.

William, that isn't going to get you much in JAX, and certainly not a 3 unit that is worth owning.  Figure 25% down (on small multi), closing costs, and setting aside reserves.  At most you have only 14k for down payment with a conventional loan.  So under $60k property.

All of those markets are a little more expensive than others, but you aren't really going to find a triplex anywhere that you can use only $20k to buy. If you do find something that cheap, you should be extremely leery because there's a reason it's priced that cheap. 

$20k would just barely get you a decent quality SFR in a lot of markets. Anything cheaper should come with a lot of caution.

Happy to explicate more if you want me to. Not trying to be a buzzkill.

@Ali Boone The reason why I like sites like this is because there is no emotional attachment to the person you're speaking to. In business I don't want anything sugar coated so thank you. I've seen a duplex for 91k in Jacksonville. Thoughts???

 https://www.realtor.com/realestateandhomes-detail/...

Haha. I agree. It's funny though if you read a lot of responses throughout random forum chains that people seem to for some reason have emotional attachment, based on their responses. Not sure why, but some people like to get emotionally charged when they don't need to. I definitely prefer to stick to the 'do what you want, it won't affect me at all, but I can at least offer you some points for consideration...' :)

Well, more than anything, I can't speak to anything in Jacksonville right now because it's possible that duplex is now underwater :( Not sure on the flooding issues from Irma, but I know they are severe. So that's one part. But then outside of that, I would do a lot of research on the neighborhood that property is in. It's extremely cheap for a duplex, and then combining that with just the look of it...my hunch is it's going to attract a very specific type of tenant, and one who could cost you a lot of money. It's never a guarantee with higher-end or lower-end tenants, but your risk of a bad tenant increasing as the quality of property decreases. And in my experience, bad tenants are by far the #1 most costly expense of an investment property. 

Are you set on J-ville for any reason in particular?

Originally posted by @William DeLuca :

@Ali Boone The reason why I like sites like this is because there is no emotional attachment to the person you're speaking to. In business I don't want anything sugar coated so thank you. I've seen a duplex for 91k in Jacksonville. Thoughts???

 https://www.realtor.com/realestateandhomes-detail/...

 Not trying to throw another buzz kill in but is that duplex still there after Irma? If so how much more work is needed on it?

@William DeLuca

1. That area might actually be underwater, there huge flooding in 32210.

2. I've looked at that property before and given the surrounding neighborhood I would try to find a good bullet proof vest for your PM if you decide to buy it. 

@William DeLuca You should research some midwest cities like St Louis or Kansas City . If you have the right connections and really work at ,you can find duplexes for 100k or less. You just have to decide if you want the 50k duplexes because those are in the hood of the midwest cities. You can find 100k duplexes in decent working class areas. The toughest part about investing out of state is finding reliable, honest property managers. Good luck in your research. The nice thing about real estate investing is that a person does not have to be perfect and can still make money. 

@Gordon Cuffe I've been told more than once about KC. I'll have to do some research in that market. I am closing in on 30k now so hopefully my returns will be higher. Can I get a mortgage for less than 100k? I was told it is difficult to get a mortgage for less than 100k. And any wise words for a 28 year old first time investor making 90k salary?? Thanks Gordon!

@William DeLuca there is no problem getting mortgages below 100k. It is very tough finding mortgages below 50k. Just buy a property where you make money every month so that if a tenant moves out you have cash reserves at that moment . If the tenant never moves out then you have cash reserves to pay off the mortgage early or to buy another property. 

@Chris Carson What area or zip code you recommend investing  in Jacksonville. I was considering trout river location to buy single family homes. murray hills homes are on the rise and cost over 90k for a descent single family residents. since you in the area what do you suggest I invest my money to build a nice portfolio of rental properties. I currently invest in 32209 and 32206 area because the homes and multifamily are cheap and we buy cash and rent them out. but long term this area is not an area to be investing what are your thoughts.

@Joel F.

It really depends on what you are after. While my dad and I own a property in 32206 (it was a weird situation) I would not buy in 06, 08, or 09. Just not my thing. Trout River has some decent pocket neighborhoods but I am just leery about anywhere that is essentially surrounded by war zones. I'm also not sure how that area fared after Irma, but I bet there was some degree of flooding. Murray Hill is getting pretty competitive these days but there are still deals to be had if you know where to look. My broker just wrote an offer on a nice triplex in MH yesterday and I personally have a few deals in the pipeline in 04, 05, and 10. Irma is definitely going to effect our market and I have a feeling quite a few folks are rethinking investing in some areas that were otherwise pretty desirable, specifically Riverside and San Marco. It will be interesting to see how that plays out long term. I shudder to think how much my insurance premiums are about to go up. Feel free to PM me if you want some more specifics.   

@Chris Carson I believe 06, 08, 09 for investors is to fix those properties up so it can get approve for section 8 vouchers only and if they do damage your place they can jeopardize loosing their voucher. I like the war zone areas because I can buy them cash and fix the property outright without getting loans from the bank with tenant in place and sell to an investor as turnkey rental. I will look into 32204, 05, 10 as you stated for my personal long term rental portfolio.

@William DeLuca - Have you considered doing some wholesaling to build up your cash funds enough to make your first purchase? Sending out mailers may be an option for you to work with a turnkey company in a market that provides good cashflow. I can provide contacts for the turnkey company i use in Indianapolis if you'd like; they're always looking to partner with wholesalers

@William DeLuca As others have pointed out, that's not going to be enough to buy a MF in an area that will perform well for you. You might want to lower your sights a little and buy a single family in a much better area. With $20K, you can buy a decent B class single family property in Indianapolis or Kansas City in the $80K range.

You will get the biggest bang for your buck in the Midwest. Kansas City is a great place to look due to its low-cost housing but thriving market, just as @Mike D'Arrigo mentioned above. I highly encourage you to search out the market here. If you have any questions, I'd love to be of assistance. Just give me a call and mention BiggerPockets. Thanks! I wish you luck!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you