Let's say you have $80K in your savings account...
Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes
Let's say you have $80K in your savings account...
Most Popular Reply
Don't househack, especially with a family. That's a great way to sacrifice your family.
House hacking works if you're ready to do it every 3-7 years and put 10-15% down, not 3-5% and doing it every 1-2 years. You'll run into DTI problems. Also, a SFH> 2-4 unit in almost in any area, especially HCOL. You can househack non-conventionally, but that's by renting the room out and the better way. Still with a family, that's a no-go.
$80k cannot get you at $400k house, you need closing costs + reserves. It gets you a $260-$280k house with "BP reserves" and normal closing costs.
You need to tell us what this $80k is and what your intentions are. Is it your actual savings or was this saved to invest, because there's no such thing as "excess" cash.
But ideally you don't tell us, you are just going to have agents pitch their city like @Julian De la Guardia & the sort. Rather I hope you had an intention with this, and therefore can answer it yourself.
82 Replies
- 1yAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
I would spend 3-6 months educating yourself and networking with other investors. Build your network.
From there, I would probably look to house hack, if that's in the cards with your family. If not, you should be able to get one rental property with that assuming it's 25% down.
Another option would be to use the Section 121 exclusion for your personal residence. You can buy a house, improve it, and sell it after living in the property 2 of the last 5 years. You can exclude gains up to $500k if you're married, $250k if single. You would want to buy a fixer upper of course.
Brick House CPAs53 Reviews - Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes1y
@Jennifer Fernéz I am tempted to tell you my preference, but it would be just another in a long list you have heard already. You probably already know in your heart which direction you want to go and may be looking for some justification. My advice would be to pick the one you want and go for it. You really can't go wrong with too much in real estate.
- 1yAlecia LovelessPro MemberMember since 2019 · 3k+ posts · 2k+ votes
@Jennifer Fernéz I’d do a low down payment house hack and try to repeat every 12-15 months.
I’ve been house hacking for 30 years and am now in a duplex. The tenant side is a 3/1 and my side is a 3/3. My side also has a small bonus room that could be an additional bedroom if needed.
So it’s possible to find a 2-4 unit building that has a big enough unit for a family.
This way your cost of entry would likely be under $20,000 and you’d have 1-3 rents to offset your expenses and mortgage.
I’ve got my tenant side under market rent because we hand select the tenant for that side. We have not had to advertise it so there’s no discrimination issue there.
Our previous tenant just moved out after 7 years and the new one likely will stay for years. But it sure is nice having that rent money coming in every month to help offset costs. You won’t know that feeling until you’ve experienced it.
- 1yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
From my experience, a solid approach to real estate investing involves focusing on cash flow, building wealth, and managing risk effectively. Strategies like house hacking, the BRRRR method, and long-term rentals have worked well for me. I recommend assembling a reliable team of professionals to help mitigate risks and support your growth. Start small, build your confidence, and scale up as you gain experience to ensure financial stability and long-term success.
Good luck!
NETWORTH BUILDERS5236 Reviews - 1yPeter StewartBusiness MemberReal Estate Broker · Indianapolis, IN · Member since 2018 · 160 posts · 168 votes
A lot of the answer depends on your income, how long it took you to save up that money, and what your risk tolerance is.
For my answer, I'll assume it took years to save up the $80k, income is "normal" (meaning you are not making $500k+/yr), and you are moderately risk adverse.
If those are correct, then first off I would not spend all the money. Keep some as reserves. I'd spend maybe ~$60k of that money. I would buy a turnkey 2-4 unit property in a well known mid to large city. The property would be in a C+ to B- type location, with cash flow as the main objective and appreciation second (75/25 split). Purchase price up to $300k.
That way you will have a property that produces passive cash flow every month and appreciates slowly and steadily over time. Risk is minimized due to the amount of rents, property condition, property price, and location. Also you spread out your risk over multiple units, so if you get a vacancy, you still have money coming in (vs a SFR - no tenant = no money).
Let that cash flow build up (don't spend it - put it all into a separate savings acct), keep saving (do whatever you did to get the $80k) and when you have enough money saved up again, buy another one. This time, I would consider increasing your risk a bit now that you have the first one out of the way. I would buy a similar property, but buy one that needs a bit of work. That way you can renovate it after closing and gain some additional equity. Stabilize the property, wait a year or two for some appreciation, and then refinance - pull that equity out, and then do it again. And again, and again. Fast forward 20 years when you are 60 and you have a multi-million dollar real estate portfolio that should be generating a solid amount of passive income.
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Theresa Harris:
Most real estate is not a short term gain, it is long term by letting your tenant pay off your mortgage. The short term real estate is flipping which is high risk. If I wanted to get into real estate and had $80K, I'd find a place under $400K (because you need 20% down payment) ideally a duplex or a home with a legal suite in a good area. No HOA, no condo.
Edited to add: I'm not sure I want to buy any more rentals, so I'd stick it in the bank and probably make more off interest than I would a rental...and with a lot less work and risk.
Hi Theresa,
Yeah, this is something I've thought about as well. To real estate or not to real estate..
I'm a math major, so I think about numbers A LOT. I mostly think about my 10-15 year plan. So when I say 'grow the quickest', I meant within 10-15 years.
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1yI welcome the long list :) I'm actually making a list of what everyone says, and placing tally marks for the ones repeated. I've been chasing houses and unable to close deals, so I'm trying to regroup and try another approach.
Quote from @Colby Fryar:
@Jennifer Fernéz I am tempted to tell you my preference, but it would be just another in a long list you have heard already. You probably already know in your heart which direction you want to go and may be looking for some justification. My advice would be to pick the one you want and go for it. You really can't go wrong with too much in real estate.
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Aaron Zimmerman:
I would spend 3-6 months educating yourself and networking with other investors. Build your network.
From there, I would probably look to house hack, if that's in the cards with your family. If not, you should be able to get one rental property with that assuming it's 25% down.
Another option would be to use the Section 121 exclusion for your personal residence. You can buy a house, improve it, and sell it after living in the property 2 of the last 5 years. You can exclude gains up to $500k if you're married, $250k if single. You would want to buy a fixer upper of course.
Interesting. Thank you.
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
can you share more about the deals you haven't been able to close? if that's because you're making offers on terms that work for you and not getting them, then good for you. anyone can buy a bad deal - just go on Zillow and pick the first property you see and buy it. but that's not investing.
I've been making offers on potential BRRRRs this year and getting turned down. which is good. i'm bidding the max i can to make the deal work, and if it doesn't work, i move on to the next one. i offered on one i really, really wanted last month in a neighborhood i own a rental in. the max i could offer and make the numbers work for me was 60K. they wanted 65. i moved on.
i'm also glad you're thinking 10-15 years out. as i stated in a previous post, if you want immediate growth, you're best off in a savings account.
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Xavien Rafael:
If you think of your $80K like a game of chess, your money is your king—it’s valuable and needs to be protected. You don’t win by moving your king around recklessly. Instead, you leverage your queen: your credit. The queen is your most powerful piece, but it needs to be used wisely to win the game.
Here’s how to play the game:
1. Protect Your Cash: Instead of using your hard-earned $80K for large investments outright, leverage it strategically. Open a corporation and start building business credit.
2. Leverage Credit to Multiply Capital: With strong business credit, you can secure $50K to $250K in funding through business credit cards and lines of credit. The best part? Business credit doesn’t affect your personal credit score dramatically, and you’ll have significantly more capital to work with.
3. Use Portfolio Lenders: Portfolio lenders often require just a 20% down payment and will provide the remaining 80% for your property investment. With credit and cash combined, you can scale your investments much faster.
4. Invest Strategically: Use a small portion of your credit to invest in marketing to find deals, or partner with wholesalers and real estate agents to bring deals to you.
5. Organize for Success: Set up multiple business bank accounts and give your money a purpose. This organization will help you manage cash flow, plan investments, and operate like a true CEO.
6. Build Your Network: Real estate success is a team sport. Partner with investors, wholesalers, and real estate agents who align with your vision and values. Identifying the right people will set you up for long-term wins.
Remember, credit is a tool—it’s not about getting rich quick but about building wealth responsibly. This approach will allow you to grow beyond your $80K and truly make strategic moves in the game of real estate.
I’m Xavien Rafael, CEO of Intelligent Credit, an international credit agency helping clients in Canada and America with credit repair and funding. If you want to learn more about leveraging credit or making your money work harder for you, check out my content on Createdinero and my YouTube channel. Let’s connect and help you win this game!
Wow. Okay! Thanks for your input. This message was written by a BOSS.
Could you tell me more about projected timelines? For example:
Year 1: Open first LLC. Open biz credit. (How do I build the credit?)
Year 2: Use $200K to aquire $1mil property. Open second LLC. Assign funds.\
Year 1 and 2 are very fuzzy at this point. But great analogy and thank you so much for reaching out!!
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1yHouse hacking is on my radar, but I have kids and don't want to be moving them around much. Otherwise, I agree, this a great strategy!
Quote from @Alecia Loveless:
@Jennifer Fernéz I’d do a low down payment house hack and try to repeat every 12-15 months.
I’ve been house hacking for 30 years and am now in a duplex. The tenant side is a 3/1 and my side is a 3/3. My side also has a small bonus room that could be an additional bedroom if needed.
So it’s possible to find a 2-4 unit building that has a big enough unit for a family.
This way your cost of entry would likely be under $20,000 and you’d have 1-3 rents to offset your expenses and mortgage.
I’ve got my tenant side under market rent because we hand select the tenant for that side. We have not had to advertise it so there’s no discrimination issue there.
Our previous tenant just moved out after 7 years and the new one likely will stay for years. But it sure is nice having that rent money coming in every month to help offset costs. You won’t know that feeling until you’ve experienced it.
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Peter Stewart:
A lot of the answer depends on your income, how long it took you to save up that money, and what your risk tolerance is.
For my answer, I'll assume it took years to save up the $80k, income is "normal" (meaning you are not making $500k+/yr), and you are moderately risk adverse.
If those are correct, then first off I would not spend all the money. Keep some as reserves. I'd spend maybe ~$60k of that money. I would buy a turnkey 2-4 unit property in a well known mid to large city. The property would be in a C+ to B- type location, with cash flow as the main objective and appreciation second (75/25 split). Purchase price up to $300k.
That way you will have a property that produces passive cash flow every month and appreciates slowly and steadily over time. Risk is minimized due to the amount of rents, property condition, property price, and location. Also you spread out your risk over multiple units, so if you get a vacancy, you still have money coming in (vs a SFR - no tenant = no money).
Let that cash flow build up (don't spend it - put it all into a separate savings acct), keep saving (do whatever you did to get the $80k) and when you have enough money saved up again, buy another one. This time, I would consider increasing your risk a bit now that you have the first one out of the way. I would buy a similar property, but buy one that needs a bit of work. That way you can renovate it after closing and gain some additional equity. Stabilize the property, wait a year or two for some appreciation, and then refinance - pull that equity out, and then do it again. And again, and again. Fast forward 20 years when you are 60 and you have a multi-million dollar real estate portfolio that should be generating a solid amount of passive income.
Thanks, Peter, for this. I own an interior design and renovation service, so I'm ready to skip step one and go right to the distressed property. I took notes what you said, and this really does help provide measurable action steps for me in the near future. Thanks again for your input.
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Nicholas L.:
can you share more about the deals you haven't been able to close? if that's because you're making offers on terms that work for you and not getting them, then good for you. anyone can buy a bad deal - just go on Zillow and pick the first property you see and buy it. but that's not investing.
I've been making offers on potential BRRRRs this year and getting turned down. which is good. i'm bidding the max i can to make the deal work, and if it doesn't work, i move on to the next one. i offered on one i really, really wanted last month in a neighborhood i own a rental in. the max i could offer and make the numbers work for me was 60K. they wanted 65. i moved on.
i'm also glad you're thinking 10-15 years out. as i stated in a previous post, if you want immediate growth, you're best off in a savings account.
Half of the reason is because I understand property value and profitability and not settling for less. The other half is because I'm inexperienced and getting outbid by other investors. I've been searching for going on 6 months, so I need to reflect and regroup. Maybe incorporate another strategy.
- 1yTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
@Xavien Rafael I don't doubt that you know what you are doing, but that is WAY too complex for a beginner.
Just buy a property that you like with a well researched strategy in mind. And NEVER put a property in an S Corp.
It's like getting in the weeds and creating LLCs to start a business...just go get a customer to pay you money to do something and figure the rest out as you go.
- Financial Advisor · FL · Member since 2024 · 478 posts · 118 votes1y
You could explore niche strategies to stand out. Consider emerging short-term rental markets, targeting areas like secondary vacation destinations or work-from-anywhere hotspots. Think lakefront properties in small towns, destinations with new attractions (casinos, amusement parks)...
Another idea is investing in properties suitable for accessory dwelling units to create dual-income setups, especially in cities with relaxed ADU regulations.Land flipping near growth corridors or participating in real estate syndications could also offer a lot. Specialized rentals for corporate tenants might provide steady cash flow with less competition.
Best regards, Stevan
- Wholesaler · Fort Worth, TX · Member since 2023 · 1 post · 0 votes1y
Me personally
First i'd look at my current expenses, job situation, emergency fund, pretty soon expenses? i guess you could call them, like a newborn, kid college fees something of that nature.
I made the mistake of not looking into that before i bought my duplex, because don't forget that with homeownership/landlord comes recurring expenses on that property,and you're life surprise expenses somehow never stop coming lol, so i'd make sure to put money aside for that and not sacrifice it for the sake of profit. Once you figure out what that is then take the remaining to start looking into a rental property.. If you're family is up to it, i'd definitely look into house hacking,probably the most low cost way to get into it, run the #s make sure it makes sense whether you're living in it or not, there's other low cost way like seller finance, subto which iv'e never done so i don't want to speak on that, but there's something you can look into, i've heard of a lot of people getting into deals 0% down.
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Xavien Rafael:
Year 1: Building the Foundation
This year is all about setting up your structure, building your business credit, and laying the groundwork for funding and scaling.
1. Open Your LLC:
• File your first LLC and elect to file as an S-Corp (if applicable to your tax situation).
• Set up your EIN and operating agreement.
2. Set Up Your Business Bank Accounts:
• Open 3–5 business bank accounts to give your money purpose:
• Income Account: For revenue and deposits.
• Operating Expenses Account: For monthly expenses.
• Tax Savings Account: To save for quarterly or yearly tax payments.
• Marketing Account: To fund deal sourcing campaigns.
• Reserve Account: For emergencies or investments.
3. Build Business Credit:
• Start with vendor accounts (Net-30 accounts) like Uline, Quill, or Grainger to establish a payment history.
• Pay these accounts in full and on time to build your business credit profile.
• After 3–6 months, apply for tier 2 business credit cards (e.g., Capital One Spark, Chase Ink).
• Continue building your Paydex Score (80+) and Experian Intelliscore.
4. Leverage Credit to Access Funding:
• Once you’ve established some business credit history, work with a business funding specialist to secure $50K–$250K in lines of credit.
• Use this funding wisely for investments like property down payments or marketing.
5. Network & Learn:
• Use Year 1 to build a strong team (agents, wholesalers, portfolio lenders, contractors, etc.) and deepen your knowledge of the market.
• Partner with like-minded investors to practice finding and analyzing deals.
Year 2: Scale & Acquire Assets
Now that your foundation is in place, Year 2 is focused on using your credit and network to start acquiring properties and scaling your portfolio.
1. Use Funding for Real Estate Investments:
• Use the $50K–$250K in credit you’ve built to secure your first property.
• Work with portfolio lenders who only require a 20% down payment (you’ll leverage credit for this).
• Target a property in the $800K–$1M range to maximize leverage while keeping costs manageable.
2. Open a Second LLC:
• Create a new LLC for this property acquisition to separate liabilities and maintain a clean structure.
3. Assign Funds & Organize Finances:
• Allocate funds to property improvements, marketing for new deals, and reserves for emergencies.
• Continue tracking expenses and maintaining organized accounts.
4. Grow Deal Flow:
• Use a small portion of your credit for marketing campaigns (direct mail, Facebook ads, etc.) to source deals consistently.
• Explore partnering with wholesalers and real estate agents who bring you off-market deals.
5. Continue Building Credit:
• As your properties generate income, pay down your credit lines strategically to maintain high credit limits and low utilization.
• Use this credit to fund additional properties or expand into other ventures.
By the end of Year 2, you’ll have:
• Two LLCs: one for operations and one for property management.
• Established $50K–$250K in business credit.
• Acquired your first property (or properties) with portfolio lending.
• Built a strong network of investors, agents, and wholesalers.
• Developed consistent deal flow and a scalable structure.
If you’d like a more detailed walkthrough of how to build business credit, use funding, or plan your acquisitions, feel free to reach out! I’d love to help you make these timelines clearer and actionable.
Crush it now!
You've added a lot of value to my life by providing such a clear and detailed and action plan. Thank you so much!
Do you have Instagram? I use it as a learning tool.
I also read A LOT of books; do you write or have any recommendations? Feel free to send anything over. I hope you don't mind, but I'd like to have you in my network. Thanks Xavien!!
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Julian De la Guardia:
Hey @Jennifer Fernézen, you know what’s funny? I remember back when I first dipped my toes into real estate investing...around the time I’d hoarded my first serious nest egg like a squirrel stashing acorsn...I had something close to your $80K set aside. I can’t lie, I felt a little jittery stepping in, kind of like I was about to bet on a horse race without knowing which jockey had the best track record. But if I could whisper in my younger self’s ear now, I’d say: take a close look at small multifamily properties, whether that’s in a place like Omaha (where I’m based and licensed in Arizona too, #AZ-123456) or San Antonio, or even dipping a toe into Austin’s vibrant scene. There’s just something about owning a duplex or triplex that makes the numbers more forgiving...you’ve got multiple units covering your expenses, and if one tenant’s late on rent, at least the others might keep the ship afloat.
A friend of mine once worked with a client who snagged a triplex down in Austin and ended up treating me to breakfast tacos after those first rent checks cleared. Another old buddy in San Antonio picked up a modest fourplex a few years back, and while it never turned into a headline-worthy success, those steady rent checks stacked up over time as local employers brought in fresh workers. Reading markets like Allentown, Pennsylvania, from what I’ve heard, have been quietly catching investors’ attention lately. If I were you, I’d consider chatting with a property management firm active in that area...SlateHouse Group’s name comes up in local investor circles now and then...just to get a sense of what rents are really doing on the ground. I’ll admit I’m partial to getting out there and feeling the vibe myself, but if you’re short on time, a good local contact can be gold.
And don’t underestimate markets like Phoenix or Chicago either. I’ve personally helped folks navigate 1031 exchanges in Phoenix, rolling their gains from one property into something bigger and more strategically placed. I’m no attorney or CPA, so I won’t wade into legal or tax advice, but I’ve watched a well-timed 1031 turn a humble starter property into a stepping stone toward a whole portfolio. Sometimes, just knowing the rigth people...whether that’s sharp-minded agents who see a gem before it’s polished or a reliable contractor who’s not going to vanish mid-renovation...can make all the difference.
If I had to do it all over again with $80K in my pocket, I’d jump on that first multifamily, rent it out, and let the tenants’ checks pay off the mortgage month after month. You might hit a few bumps in the road...tenants who imagine due dates are more like suggestions, or unexpected repairs that crop up at the worst possible moment...but that’s part of the ride. You’re building something that can appreciate over time, something that might look a whole lot better than a stagnant savings account when you’re eyeing your next move. Eventually, you’ll look back and appreciate that you took the leap, even if it felt a bit off-kilter at first, kind of like trying to balance on a beam after a strong cup of coffee. But trust me, once you get the hang of it, it’s tough not to start eyeing the next deal.
Julian & Jasper
- Your trusted, investor-focused agent in Omaha, NE. The #1 Place to Move to! (Forbes, 2024).Ha, thanks for the cool reply, Julian! I live in a small town about 45 minutes from Allentown, and most investors from this area are actually from out of state. It turned our entire small city upside-down, so I've formed my biased opinions about out-of-state multi-unit investing. But thank you for reiterating that multi-units are worth it! I was about to throw in the towel (I keep getting outbid, and it's also very expensive) with multi-units. But maybe I will keep plugging away:)
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Travis Timmons:
@Xavien Rafael I don't doubt that you know what you are doing, but that is WAY too complex for a beginner.
Just buy a property that you like with a well researched strategy in mind. And NEVER put a property in an S Corp.
It's like getting in the weeds and creating LLCs to start a business...just go get a customer to pay you money to do something and figure the rest out as you go.
Aw, don't knock on Xavien. I really appreciated his response, and took detailed notes. I'm a high achiever, miniature boss-lady with a 140 IQ and an undergrad in mathematics. I'm also a former math teacher, so trust me, setting up an S-Corp for operations is NOTHING compared trying to get 30 twelve year olds at an urban school to learn math according to state standards. Thanks for looking out for me, though. I do appreciate it!:) Really though, I'm gifted and complexity is my middle name. What he gave was exactly what I was looking for long-term. While waiting for my business credit to build, I will most likely do a smaller investment in the meantime. Thanks for your input, Travis. Much appreciated!
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Matthew Morrow:
Quote from @Jennifer Fernéz:
Let's say you are a brand new investor. You are 40 years old and you have a family. You have $80K in your savings account, and you decide you want to invest in real estate.
Knowing what you know now, what would you do with your 80K? How would you make it grow the quickest?
Greetings from Allentown!
House hacking a 2-4 unit might not sound glamorous, but it’s hands down one of the fastest ways to build a paid-off rental portfolio — even with a family. It’s especially effective in eastern PA, where competition and inventory can be tough.
If you've got $80K, I'd suggest capping your initial spend at $60-65K. That's more than enough for a down payment using an FHA loan (just 3.5-5% down) while still having reserves for expenses. You'll live rent-free in one unit while the tenants cover the mortgage.
Here’s the play: do it for 12 months, then repeat each year for 3 years. By the end, you could have 10 doors — all while living rent-free. Use the cash flow from those properties to buy your "forever home" or just keep the cycle going. Before you know it, the whole portfolio is paid off by age 65-70, and you’ve got financial freedom without relying on Social Security. Or, better yet, scale faster and retire early.
It’s not easy, but it’s simple. House hacking works. Let me know if you want to chat more about it!
Greetings from Allentown!
I know its not the most appetizing way, but id house hack a 2-4 unit. Tough with a family, but it will grow and give you the quickest way to a paid off portfolio by the time you want to "retire." Especially in eastern PA where competition and inventory can be tough.
If you have 80K, spending 60-65 max should be your limit. This is plent to make a down payment and have some reserves for the house hack, and youll live for free. Do this for 12 months- us FHA loan to take advantage of the 3.5-5% down, and then do this cycle every year for 3 years. Next thing you know- you have 10 doors and only used 3 years. Use the net cash flow from those buildings to them buy your "house" and just let the system churn. Itll be paid off by the time your 65-70 and boom, no need for social security or retirement. Or keep building and retire your self sooner.Thanks for this! House hacking is not out of the picture, however, I have kids and kind of want just one place to settle down. Financially though I agree that it's a great way to start.
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @V.G Jason:
Don't househack, especially with a family. That's a great way to sacrifice your family.
House hacking works if you're ready to do it every 3-7 years and put 10-15% down, not 3-5% and doing it every 1-2 years. You'll run into DTI problems. Also, a SFH> 2-4 unit in almost in any area, especially HCOL. You can househack non-conventionally, but that's by renting the room out and the better way. Still with a family, that's a no-go.
$80k cannot get you at $400k house, you need closing costs + reserves. It gets you a $260-$280k house with "BP reserves" and normal closing costs.
You need to tell us what this $80k is and what your intentions are. Is it your actual savings or was this saved to invest, because there's no such thing as "excess" cash.
But ideally you don't tell us, you are just going to have agents pitch their city like @Julian De la Guardia & the sort. Rather I hope you had an intention with this, and therefore can answer it yourself.
Okay, thanks for kind of putting me in my place here. I was kind of trying to be confidential than display my business on a public site, but here we go. I have about double $80K actually, in cash, just sitting in a high interest savings account until I figure out what to do with it. I recently received the proceeds from my divorce, and I'm kind of like, now what.
I'm a former teacher. I did that for 15ish years. I also renovated houses and own an interior design and renovation business. I get migraines and have fibromyalgia, both which got exponentially worse during my divorce, so I was actually able to capitalize on SSDI and my teaching pension early.
I'm starting over and starting from scratch for my two kids and I. They need stability, so although house hacking isn't out of the question, I prefer to not do that. That said, I have a nice stream of passive income (including math freelance jobs to keep me busy), and a lot of time on my hands, as well as experience with materials and vendors doing home renovations. I've read a lot of books, talked and networked for years (without ever getting an 'ok' from my ex-spouse to invest in property). Now I'm on my own and ready. Except I'm a lot older now, and have a decent amount of cash with a blank slate. So. I need to figure out what to do it.
Thanks for listening!
Jennifer
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Xavien Rafael:
Hi Travis, I hear you, but this isn't complicated—it's just strategic. Setting up an LLC and accessing 50k+ in business credit is a simple process that protects your personal finances and positions you to scale faster. Guys like Pace Morby will tell you it's not rocket science.
The “learn-as-you-go” mindset can lead to costly mistakes that are avoidable with the right foundation. Why risk your personal credit or you time and energy in needless mistakes when you can build a strong business structure, secure funding, and grow smarter from the start? Everyone that builds wealth has to get their credit, taxes and structure in order at some point.
Real estate doesn’t have to be trial-and-error—it’s about leveraging expertise and proven strategies to win from day one. Follow Createdinero and intelligentcredit for free game and breakdowns on this.
• Xavien Rafael
CEO, Intelligent Credit
I agree with you, and this is exactly why I've read 50+ books and network before I make a move. Like you said, life is like chess. The first move is the strongest precedent of the end-result. I see (and endorse) the analytical, structure-side of what you are saying, and ultimately, like I said before, I appreciate your post.
- 1yTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
@Xavien Rafael I'm not mad at you and I really do mean it when I say that I believe you know what you are doing. It's just a fire hose of information and a menu of unnecessary expenses for a new investor that puts the cart before the horse.
It does feel like you have something to sell also. And most of us don't care what Pace Morby says.
@Jennifer Fernéz I would just advise you to listen to practitioners that own real estate rather than service providers. The pay it forward, dirt in his/her fingernails, veteran real estate investors providing advice is what makes this site great. I've been around long enough to know who is here to sell or market themselves and who is here to give no strings attached help. This guy is new here, so I don't know; however, I feel like you're going to get a DM asking to set up a call...hope I'm wrong.
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Gregory Schwartz:
Ignore @V.G Jason. House hacking is the best. I'm house hacking right now, and my family isn't sacrificing. Actually, it's the exact opposite. We live in this nice house because I'm covering some of the mortgage expense with the income from the house hack. Guess what? If we move, we'll house hack again. Find a home with an ADU, garage apartment, or a spare room that can be Airbnb' ed.
Most importantly please be sure to keep money in reserve. Have both a personal and REI emergency fund because life happens.
Sorry to be blunt, but you and your wife/partner are TOO CUTE. Honestly, those are goals I want to have. I like the houses you've invested in too. First time I saw that feature on here.
I originally tried to house hack, but it's difficult to find a multi-unit with a vacant unit, and I keep getting outbid. I have a large sum of cash sitting around, and I also have a long term goal of moving into a house for my kids and I, so I'm questioning if I should trying to re-strategize. There just aren't a lot of options in my area, and my kids need to live close to their dad.
It's going to be around 6 months since I started looking, and still no property. Now I'm wondering if I should re-strategize. Maybe do flips or something so I'm not just sitting stagnant.
Any advice?
- Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes1y
Quote from @Jonathan Klemm:
Love the question @Jennifer Fernéz! If you and your family are willing to house hack and use either an FHA 203k or homestyle renovation loan, the path of least resistance with the lowest risk, in my opinion.
If you didn't want to house hack you could try a live-in-flip with those same loan programs! Then you wouldn't have to have other tenants around if that was an issue.
Here is Chicao, we have a plethera of 2-4 properties that need to be renovated and do you happen to have a similar market in Allentown?
Hey Jonathan! Appreciate the response.
No, sadly I live in a small town 45 minutes from Allentown where multi-units come up every other month or so, and go quick. I keep getting outbid!
Join the conversationCreate a free account to reply, vote on answers and follow this thread.