How much $$$ did you have when you started investing?

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How much $$$ did you have when you started investing?

Maranda TuckerPro Member
Property Manager · Charlotte, NC · Member since 2022 · 152 posts · 118 votes

My husband is convinced we have to be making $200k + a year before we can start investing. I KNOW that isn't the case. I have met a few that started with very little and built their empire over time. 

When you first started investing, how much did you have in your pocket? How much in the bank? Would love to hear from you!

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Sergey A. Petrov
Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
4y

I had zero or maybe even negative. Barely out of college, with a newborn, wife unemployed. Bought a condo using an FHA loan. It needed some work, water heater blew a week after closing. I remember getting my final estimated settlement statement the day before closing and realizing i was twenty or something bucks short for that due from borrower line item. That $20 was stressful!

Lived in and worked on the condo in the evenings and on the weekends, repainted, replaced flooring, appliances, some other outdated fixtures, sold it two years later with a gain nearly equivalent to my gross W2 earnings at the time. That was 20 some years ago 

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  • Sergey A. Petrov
    Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
    4y

    I had zero or maybe even negative. Barely out of college, with a newborn, wife unemployed. Bought a condo using an FHA loan. It needed some work, water heater blew a week after closing. I remember getting my final estimated settlement statement the day before closing and realizing i was twenty or something bucks short for that due from borrower line item. That $20 was stressful!

    Lived in and worked on the condo in the evenings and on the weekends, repainted, replaced flooring, appliances, some other outdated fixtures, sold it two years later with a gain nearly equivalent to my gross W2 earnings at the time. That was 20 some years ago 

    12Reply
  • Maranda TuckerPro Member
    OP
    Property Manager · Charlotte, NC · Member since 2022 · 152 posts · 118 votes
    4y
    Quote from @Sergey A. Petrov:

    I had zero or maybe even negative. Barely out of college, with a newborn, wife unemployed. Bought a condo using an FHA loan. It needed some work, water heater blew a week after closing. I remember getting my final estimated settlement statement the day before closing and realizing i was twenty or something bucks short for that due from borrower line item. That $20 was stressful!

    Lived in and worked on the condo in the evenings and on the weekends, repainted, replaced flooring, appliances, some other outdated fixtures, sold it two years later with a gain nearly equivalent to my gross W2 earnings at the time. That was 20 some years ago 

    Oh my gosh. I love this. Thank you for sharing!! What was your biggest "Aha" lesson from that experience??
    806-685-1818
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  • Sergey A. Petrov
    Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
    4y

    No real aha moment just a confidence boost to my young self with a “I am capable of accomplishing whatever I want to accomplish” attitude 😁. Have fallen on my face plenty of times but you learn from your mistakes, get up, and keep moving forward 

    5Reply
  • Jared Wonders
    Charlotte, NC · Member since 2017 · 71 posts · 32 votes
    4y

    This is a great question/point and appreciate you bringing this up @Maranda Tucker! When my wife and I started REI we had very little to our name as far as assets go but had been saving at a VERY high rate for a year or two prior to getting into investing. We were in a position to have very solid incomes, yes, but the fact that we had a good financial foundation combined with a very high savings rate helped us overcome our first investment "miss". Having a good reserve (sunk) fund in place will help you avoid a lot of headaches when you get started.

    1Reply
  • Jason Maguire
    Investor · Troy, NY · Member since 2020 · 120 posts · 93 votes
    4y

    I had 12k total & only made about 49k at the time of the purchase. Used a conventional primary loan putting only 5% down and ended up getting a seller concession so i only paid about 10k at closing, leaving me almost broke (haha)

    Next purchase, i only had 20k but partnered up with 2 partners and only had to put 13k down each. You definitely don't need to be a millionaire to get started, you just have to get creative :)

    2Reply
  • Maranda TuckerPro Member
    OP
    Property Manager · Charlotte, NC · Member since 2022 · 152 posts · 118 votes
    4y
    Quote from @Jason Maguire:

    I had 12k total & only made about 49k at the time of the purchase. Used a conventional primary loan putting only 5% down and ended up getting a seller concession so i only paid about 10k at closing, leaving me almost broke (haha)

    Next purchase, i only had 20k but partnered up with 2 partners and only had to put 13k down each. You definitely don't need to be a millionaire to get started, you just have to get creative :)


     I was speaking to a lady today who owns a $450k home, has $250+ in equity and $100k in cash and thinks she doesn't have enough to get started. It is stories like these that remind us IT IS POSSIBLE. Thank you for sharing!

    806-685-1818
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  • Maranda TuckerPro Member
    OP
    Property Manager · Charlotte, NC · Member since 2022 · 152 posts · 118 votes
    4y
    Quote from @Jared Wonders:

    This is a great question/point and appreciate you bringing this up @Maranda Tucker! When my wife and I started REI we had very little to our name as far as assets go but had been saving at a VERY high rate for a year or two prior to getting into investing. We were in a position to have very solid incomes, yes, but the fact that we had a good financial foundation combined with a very high savings rate helped us overcome our first investment "miss". Having a good reserve (sunk) fund in place will help you avoid a lot of headaches when you get started.


     Thank you for sharing, Jared! You made a great point - live below your means and save save save. 

    806-685-1818
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  • Jason Maguire
    Investor · Troy, NY · Member since 2020 · 120 posts · 93 votes
    4y
    Quote from @Maranda Tucker:
    Quote from @Jason Maguire:

    I had 12k total & only made about 49k at the time of the purchase. Used a conventional primary loan putting only 5% down and ended up getting a seller concession so i only paid about 10k at closing, leaving me almost broke (haha)

    Next purchase, i only had 20k but partnered up with 2 partners and only had to put 13k down each. You definitely don't need to be a millionaire to get started, you just have to get creative :)


     I was speaking to a lady today who owns a $450k home, has $250+ in equity and $100k in cash and thinks she doesn't have enough to get started. It is stories like these that remind us IT IS POSSIBLE. Thank you for sharing!

    It really is crazy @Maranda Tucker !! there's always a million different reasons to come up with to not invest, but sometimes you have to put yourself out there and jump in!

    1Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    I had a lower than average self employment income, zero savings, and not great credit. I borrowed $10k and an extra $3,000 balloon due in 3 years (that was a lot then :-). Interest rates were 17%.

    It was a little stressful to say the least, but turned out to be a great deal....you just have to move forward and find a way.

    3Reply
  • Charlie Lockwood
    Reno NV (invest in Sparks, NV) · Member since 2021 · 33 posts · 23 votes
    4y

    I bought my first house for 200k (2016) with only 6k down. I had another 4-5k in the bank as reserves. Over the next five years, I diligently paid down my mortgage with the hopes of paying off my house is 10 years (back then I listened to Dave Ramsey). 

    Then interest rates dropped to historic lows...I then learned about debt as leverage (thanks BP). I pivoted and did a cash out refi and bought a second house (new primary) with the equity & appreciation from the first house (2021). This allowed me to rent out my first house and get a new house for my family in a better part of town (Reno, NV area). 

    The first house has been rented out for about 6 months now. So far, so good. There have been a few hiccups but mostly smooth sailing. Essentially, I bought my second house with no money out of pocket, we used the cash-out refi to pay for 20% down, closing costs, and moving expenses. 

    It is very possible to start with very little money down. However, it is not quick and there will be some ups and downs. Roll with the punches and view the process as a learning experience. 

    Best of Luck

    2Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    4y

    @Maranda Tucker your husband is dead wrong. I had $0.

    2Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    4y

    @Maranda Tucker the longer you wait, the more $ you are leaving on the table. Start today :)

    2Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    4y

    @Maranda Tucker

    You need have more knowledge of real estate investing than money.

    There are many investment deals that transpire throughout the real estate market every year. Most of them are achieved through traditional lenders and institutions like banks, but some are accomplished through less traditional means. In most cases, it’s because the investor couldn’t raise the capital or didn’t have the credit score to do so. Here are 11 ways to invest in real estate with no money:

    1. Hard Money Lenders
    2. Private Money Lenders
    3. Wholesaling
    4. Equity Partnerships
    5. Home Equity
    6. Option To Buy
    7. Seller Financing
    8. House Hacking
    9. Government Loans
    10. Microloans
    11. REITs

    All the best!

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  • Carlos M.
    Investor · Lancaster, PA · Member since 2016 · 94 posts · 356 votes
    4y

    @Maranda Tucker

    You definitely don’t need to make $200 a year. My wife and I started 14 years ago with a home equity loan. We leveraged everything and I mean everything to get the ball rolling. But I would do it all over again in a second. Since we were so leveraged we We had to keep our expenses as low as possible. We did this by self managing and doing all of the maintenance ourselves. Our rentals now gross a month what we did in both of our W-2 annually combined.

    0Reply
  • Kyle Curtin
    Real Estate Agent · Tewksbury, MA · Member since 2020 · 494 posts · 284 votes
    4y
    Quote from @Maranda Tucker:

    My husband is convinced we have to be making $200k + a year before we can start investing. I KNOW that isn't the case. I have met a few that started with very little and built their empire over time. 

    When you first started investing, how much did you have in your pocket? How much in the bank? Would love to hear from you!


    In my opinion, it largely depends on your particular strategy and a few other factors. I had about $50k in savings before purchasing my first 3 family in Leominster, MA. I used FHA financing with 3.5% down on a 470k purchase price and came out of pocket roughly $28k +/- with closing costs included. My intent was to househack and utilized the rest of that savings for my reserves. From personal experience, and helping clients buy their properties (househack or as a rental), I highly recommend keeping an amount of reserves that is a little higher than what you may think to account for some of the unknowns.

    But also, this depends on the purchase price range of the property, the condition/need for repairs and/or capital expenditure repairs, tenant situations (carrying costs for if tenants aren’t paying or you need to go through a formal eviction or a cash for keys), unit turnovers, etc. Just things to keep in mind!

    It is time to get started! Jump in!
    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y

    you will get a wide variety of answers depending on the age of the person you talking to.

    In my day starting out in the late 70s.. there was no 5% down.. what you did was 80  10 10

    10% down in cash 10% from HML and 80% bank note.. banks would not lend more than 80% in those days

    (which is probably pretty smart on their part).

    so for me new construction in Milpitas CA for 90k ( lot of money in the late 70s)  10k down 10k second at 15% due in 3 years

    and 9% first it was just a few years later in the Carter years that rates sky rocketed to 15 to 20%.

    lived there 18 months sold for 50k profit bought up market in the SF bay area and well I let appreciation do its magic 

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  • Maranda TuckerPro Member
    OP
    Property Manager · Charlotte, NC · Member since 2022 · 152 posts · 118 votes
    4y
    Quote from @Bud Gaffney:

    @Maranda Tucker the longer you wait, the more $ you are leaving on the table. Start today :)

    Couldn't agree with you more!!
    806-685-1818
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  • Katelyn Andrews
    Real Estate Agent · Middle Georgia · Member since 2020 · 54 posts · 32 votes
    4y

    I had enough money to pay closing costs on a 55k USDA loan. Not much at all. I was sweating bullets a week before closing, fresh out of college, newly married. We just sold this home a few weeks ago. It didn't make us rich, but 6X Return on Investment with just the closing proceeds, not to include the cash flow for years. On to something with better appreciation.  

    3Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    4y

    @Maranda Tucker
    I bought my first rental washing dishes making 13k a year with 17k saved up at 19 years old. I put 13k down and had 4k in reserves. That statement is definitely false. It was 15% down on a non-owner occupant single family if you were curious. 

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  • Scott E.
    Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    4y

    I was making $30k per year (plus some small bonuses) and had about $9k in the bank when I bought my first house. I used an FHA loan, got the seller to pay for my closing costs, and brought in roommates to help me pay for my mortgage.

    Now.. I don't know that I'd recommend repeating what I did. I stretched myself pretty thin financially and couldn't stand having roommates. But it got me into my first deal which ended up being a catalyst to get into bigger and better deals down the road.

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    4y

    @Maranda Tucker

    salary / income isn't really the right way to think about this... were you just curious what other BPers make or did you really want the community's reaction?

    you could be making $500K a year with 0 in the bank, and that would not be a good financial position to be in; conversely you could make very little but have access to lots of savings

    so... assuming this is a serious question... i'll ask 2 of my own:

    do you and your husband own a primary yet?

    do you have any savings?

    1Reply
  • Latasha Griffin
    Rental Property Investor · Atlanta, GA · Member since 2019 · 82 posts · 68 votes
    4y

    @Maranda Tucker I'm single, no siblings, caring for a disabled parent and a bunch of aging pets so I waited until I was out of consumer debt, with the exception of my primary residence and student loans, had accumulated nearly $100k in cash savings. was maxing out my 401k, HSA, IRA contributions, had optimized my spending significantly and my salary had gotten to the mid $100k's before I bought my first investment property. Honestly, I still feel insecure financially because I dont have a support system and I'm quite risk adverse by nature.

    0Reply
  • Wyatt Postal
    Flipper/Rehabber · Santa Rosa, CA · Member since 2019 · 38 posts · 15 votes
    4y

    I'm on one of the most expensive markets in California and I started with 9k making combined 75k a year. Bought a 300k condo with an insane $500 HOA hahaha. Best investment of my life so far

    1Reply
  • Joe Garretson
    Investor · Castle Rock, CO · Member since 2021 · 79 posts · 104 votes
    4y
    Quote from @Nicholas L.:

    @Maranda Tucker

    salary / income isn't really the right way to think about this... were you just curious what other BPers make or did you really want the community's reaction?

    you could be making $500K a year with 0 in the bank, and that would not be a good financial position to be in; conversely you could make very little but have access to lots of savings

    so... assuming this is a serious question... i'll ask 2 of my own:

    do you and your husband own a primary yet?

    do you have any savings?


    Interesting perspective on income. You're right, we've all met and/or know people who are "rich" because they drive a fancy car, live in a big house and identify as a VP of this or Director of that at work. We also know those people can't rub two nickels together... I'm the poor one of my friends with a 17 year old Honda Accord, a 9 year old Ford Explorer and no debt beyond our mortgage.

    My wife and I own our primary residence; have approximately $300k in equity, $15k set aside at the moment with an additional $1300/month added for strictly RE investing. We've got a six month emergency fund sitting in cash separate of this. 

    We're on the path to buying our first investment property but disagreeing on what that path is. We have agreed on a timeline that we buy before I hit 50 (have just under 4 years until then). 

    The biggest issue: she's risk averse, I'm ready to buy the first thing I see. 

    2Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    4y

    @Joe Garretson maybe you can meet in the middle.

    What does "$1300/month for RE investing" mean?  That you're adding $1300 a month to the $15K you have set aside to invest?  Or something else?

    0Reply
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