I have $ 4000, Can I get into real estate?

Denver, CO · Member since 2020 · 6 posts · 4 votes

My husband and I would like to get started in Real Estate. We are slowly saving money and have $4000. We’d like to know which strategy could be better to start. Our future goal is to have cash flow income but we heard and read that at the beginning we might need a quick income to supplement our savings first. We are getting kind of confused about how to start and we would appreciate anything you could advise us. We are in Colorado.

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Account Closed

Investor · Phoenix, AZ · Member since 2018 · 420 posts · 388 votes

@Helen Hernandez 4 years ago I combined my $10k with $5k that my brother had to buy our first house hack. Today we have over $1M in rental properties as partners. The best advice I can give you is to just get started.

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Stone Jin
Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
6y
@Helen Hernandez I would say the first thing you need to do is go work for a real estate investor. Make some extra money knocking doors or driving for dollars on weekends. This will give you some extra capital but also a mentor/knowledge provider. $4000 is not enough to do anything in real estate in my opinion. I think more doors will open up once you have $25,000 to deploy in real estate. Best of luck.
1 Reply
Darius Ogloza
Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
6y
No surer way to lose your money than by investing it when you do not have enough to cover all of your expenses. Build you capital. $25K is a good target.
2 Reply
Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
6y
Do you need more capital? Yes.
Does that mean you need to wait til you have the capital to get into real estate? No.
Real estate is about people, not properties.....so start networking.
Maybe you meet someone that has money, and maybe you hustle and find a property and can get paid for finding the property.
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Stephen KeigheryBusiness Member
Rental Property Investor · New Orleans, LA · Member since 2018 · 717 posts · 555 votes
6y
The best investment you will make right now is in your education. I am not saying to spend the $4K, there is enough free information on YouTube, podcasts, forums etc. Pour into your knowledge while you keep saving that money and you will know yourself when you can make your first investment. Also network as much as you can with both experienced investors and other people starting out. Join your local REIA. This is a marathon not a sprint and it sounds like you are already in the race.
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Helen Hernandez
OP
Denver, CO · Member since 2020 · 6 posts · 4 votes
6y
@Helen Hernandez thank you so much!
0 Reply
Helen Hernandez
OP
Denver, CO · Member since 2020 · 6 posts · 4 votes
6y
@Darius Ogloza thank you so much!
0 Reply
Helen Hernandez
OP
Denver, CO · Member since 2020 · 6 posts · 4 votes
6y
@Stone Jin thank you so much!
0 Reply
Helen Hernandez
OP
Denver, CO · Member since 2020 · 6 posts · 4 votes
6y
@Russell Brazil thank you so much!
0 Reply
Helen Hernandez
OP
Denver, CO · Member since 2020 · 6 posts · 4 votes
6y
@Stephen Keighery thank you so much!
0 Reply
Emory Keen
Real Estate Consultant · Cocord NC · Member since 2015 · 21 posts · 3 votes
6y
@Stephen Keighery I agree with Stephen
0 Reply
Account Closed
Investor · Phoenix, AZ · Member since 2018 · 420 posts · 388 votes
6y
@Helen Hernandez 4 years ago I combined my $10k with $5k that my brother had to buy our first house hack. Today we have over $1M in rental properties as partners. The best advice I can give you is to just get started.
9 Reply
John MorganPro Member
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
6y
@Helen Hernandez
No. Especially in CO. Add a zero to that and you’ll be in a good position to get started..unless you can house hack.
4 Reply
Alexandre Marques dos Santos
Rental Property Investor · Member since 2020 · 215 posts · 137 votes
6y
@Helen Hernandez
4000 doesnt get you into RE. You can start working for someone and save more. RE is a business you can definitely leverage others money, but at least you need reserves while some down money
1 Reply
Jaquetta T Ragland
Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
6y
@John Morgan I agree with this. Best way is to start with your own home and house hack when starting with only $4k. Look for first time home buyer programs.
1 Reply
Sean M.
Member since 2020 · 23 posts · 4 votes
6y
@Helen Hernandez
Great question! First, continue to educate yourself on RE. Learn your market like the back of your hand, and then decide your risk tolerance. You and your hubby should be in agreement on when to pull the plug(how much $) and your goals. Also, have you guys taken the DISC assessment? This will help you into why you approach things and how to work together. I am certified execution coach. I am willing to give you and hubby Flight assessment. DM me good luck
1 Reply
Ethan Perry
Minneapolis, MN · Member since 2019 · 54 posts · 53 votes
6y
@Helen Hernandez
The strategy of house hacking is a great way to start. You could buy a duplex and live in one half with your husband while renting out the other side. That being said, you’ll definitely want more than $4000K. A number of people have already recommended saving up to $25,000 first and that seems like a good number. Now for a first small property you may only need $10,000 to $15,000 up front if you use a low down payment loan, but you’ll want some cash in the bank left over for peace of mind. Hope this helps!
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Trebor JohnsonPro Member
Rental Property Investor · Grayson ky · Member since 2019 · 7 posts · 4 votes
6y
@Helen Hernandez like a lot of others said $4k probably isn't enough to get started. Now I don't know your market but I am in a cheaper area so I was able to buy my first cash flowing property with $9k down. So if you find the right deals you can get started without having much. But if something major happens to the place and you don't have the means to fix it then you have yourself in a bad spot. So that is another thing to think about which is why I think most people are saying to have $25k to start. I am not sure what the majority thinks about doing this but I used the equity in my personal house when I bought my second place so that may be something to look at to get started also. Just make sure you can cover that payment without rental income in case it doesn't work out. Good luck.
0 Reply
Caleb Christopher
Title Representative · Denver, CO · Member since 2020 · 126 posts · 66 votes
6y
@Helen Hernandez
The amount of cash you have to bring to closing will eat that up and more unless you find a way to use other people's money.
You CAN locate deals and wholesale them (check the laws in your state!), and make cash off that and/or use that to build relationships with others.
You CAN house hack (maybe) and start earning more and learning to deal with tenants.
You COULD sell off a car or two and downgrade to have more cash?
You may be able to find investors willing to let you your tour their renovations in your area by networking here... People do love to talk about themselves, so tap into that and use the opportunity to boost someone's ego and learn.
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Brian G.
Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
6y
@Helen Hernandez house hack. It’s the best way to begin imo and requires the least amount of experience and capital.
0 Reply
David Lee Hall, III
Rental Property Investor · Pittsburgh, PA · Member since 2019 · 530 posts · 511 votes
6y
@Stone Jin
I would disagree. $4000 would get you a legal wholesaling contract for your state, business cards, door hangers and a website. You then begin driving for dollars EVERY day on the way from work. You knock every distressed home and leave a hanger when no one is there. You also join the local REIA and start finding folks that would buy those properties from you. Find out their metrics so you can get contracts low enough.
Finally, every Saturday call every FSBO on Zillow and Craigslist. Ask if they would be open to seller financing. For those that that say yes, work on running numbers. You may get someone that has a rent ready place you can get seller financing on that would rent for $300-400 more than you finance. You could then use your proceeds from the driving for dollars to get into rentals with little out of pocket.
Remember there are 3 possible values: time, money, and quality. Without money you can always hustle your time and provide quality value to others. You will eventually be rewarded on the money end. If you had money, you could spend less time or settle for lower quality because you could just throw dollars at it.
2 Reply
Frank Hinck
Rental Property Investor · Minneapolis, MN · Member since 2020 · 540 posts · 285 votes
6y
@Helen Hernandez
I do like others comments of House Hacking a duplex because it will give you first hand LLing experience, you can put down only 3.5 FHA and then when you move on you have 2 units cash flowing. Working for another investor door knocking is a good way to learn neighborhoods, and TTP! talk to people! and learn how to counter objections from sellers.
Take a year, I know it seems long but trust us real estate and “deals” will still be there albeit anything you’re looking at now won’t. Take a year and 1- listen to a BP Show per day, 2-cut your living expenses as much as you can believe it or not you can find $1,500/month by reducing rent & car & cutting luxury expanses and in a year you will have $18,000 - this will suck but it’s an investment!! 3-Network! On BP forums, meetups, REIAs, coffees, find your local experienced operators/NOT paid gurus and see if you can help them find deals, drive for dollars, analyze deals, line up contractors - it’s your unpaid internship to soak up as much experience as you can handle - - best of luck!!
0 Reply
Stone Jin
Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
6y
Originally posted by @David Lee Hall, III:
@Stone Jin
I would disagree. $4000 would get you a legal wholesaling contract for your state, business cards, door hangers and a website. You then begin driving for dollars EVERY day on the way from work. You knock every distressed home and leave a hanger when no one is there. You also join the local REIA and start finding folks that would buy those properties from you. Find out their metrics so you can get contracts low enough.
Finally, every Saturday call every FSBO on Zillow and Craigslist. Ask if they would be open to seller financing. For those that that say yes, work on running numbers. You may get someone that has a rent ready place you can get seller financing on that would rent for $300-400 more than you finance. You could then use your proceeds from the driving for dollars to get into rentals with little out of pocket.
Remember there are 3 possible values: time, money, and quality. Without money you can always hustle your time and provide quality value to others. You will eventually be rewarded on the money end. If you had money, you could spend less time or settle for lower quality because you could just throw dollars at it.

So.... instead of my suggestion of working with an investor and learning the trade, you would suggest they put all their money into wholesaling on their own. Got it.
If she had said we have 50K but only want to spend 4K on real estate, then sure go create a website and get business cards. The way she put it was 4K was all they had. So any hiccup in life, they would need to worry about how to pay rent or buy food if they spend all their money on a wholesaling operation that still required them to essentially give up all their free hours.
Maybe I'm too risk adverse.
1 Reply
David Lee Hall, III
Rental Property Investor · Pittsburgh, PA · Member since 2019 · 530 posts · 511 votes
6y
Originally posted by @Stone Jin:
Originally posted by @David Lee Hall, III:
@Stone Jin
I would disagree. $4000 would get you a legal wholesaling contract for your state, business cards, door hangers and a website. You then begin driving for dollars EVERY day on the way from work. You knock every distressed home and leave a hanger when no one is there. You also join the local REIA and start finding folks that would buy those properties from you. Find out their metrics so you can get contracts low enough.
Finally, every Saturday call every FSBO on Zillow and Craigslist. Ask if they would be open to seller financing. For those that that say yes, work on running numbers. You may get someone that has a rent ready place you can get seller financing on that would rent for $300-400 more than you finance. You could then use your proceeds from the driving for dollars to get into rentals with little out of pocket.
Remember there are 3 possible values: time, money, and quality. Without money you can always hustle your time and provide quality value to others. You will eventually be rewarded on the money end. If you had money, you could spend less time or settle for lower quality because you could just throw dollars at it.

So.... instead of my suggestion of working with an investor and learning the trade, you would suggest they put all their money into wholesaling on their own. Got it.
If she had said we have 50K but only want to spend 4K on real estate, then sure go create a website and get business cards. The way she put it was 4K was all they had. So any hiccup in life, they would need to worry about how to pay rent or buy food if they spend all their money on a wholesaling operation that still required them to essentially give up all their free hours.
Maybe I'm too risk adverse.

You evidently missed the part where I said to join the local REIA to find buyers for your prospects. You are going to need all of those pieces I just laid out to go on your own and there is no risk in any of those items.
There is risk buying the rentals as I described, but that isn’t going on day one. Notice I said to use proceeds from your wholesaling. There was an implied success to the first paragraph before proceeding to the second.
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Stone Jin
Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
6y
@David Lee Hall, III I agree with having to hustle and do all the networking and self education. I just thought the suggestion of them spending all their money on a website and some business cards was a bit too risky for a noobie with no experience and limited capital.
1 Reply
Tim Hall
Flipper/Rehabber · Tallahassee, FL · Member since 2014 · 463 posts · 237 votes
6y
@Helen Hernandez hey there, for me the best thing I did was have someone pay my own mortgage. Whether that's house hacking in a larger single family, a duplex, triplex ect. I personally bought a big house and rented out the rooms. I went FHA and negotiated a lot of the closing costs when I bought the property. I made enough money to pay my mortgage and bills and then went on to save money for the next down payment.
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