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Updated about 10 hours ago on . Most recent reply

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Christine Brown
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How do I get started when I have no / low money down?

Christine Brown
Posted

Hi all - I've done a ton of market research, started developing a business plan, and have identified a few key areas that I'd like to invest in initially. However, I'm running into a major hiccup - I don't have enough saved for a typical down payment (in fact, I'd say I only have around 5%), but I am eager to jump in without spending the next few years pinching pennies to save up for the traditional 20% down payment. House hacking, BRRRR / flipping aren't an option for me at this time; are there other options that I can look into to purchase my first STR with no / low money down?

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Ken Boone
  • Investor
  • Greenville, SC
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Ken Boone
  • Investor
  • Greenville, SC
Replied

So the sad truth is that it does take money to make money. I know there are people all over the internet who can tell you that you can get in to real estate with no money and maybe that works for a small few. But the risks are enormous. 

The biggest issue that gets people that try to jump in on the bare minimum is things never go as planned, and you have to have reserves to cover that. Bare minimum means no reserves, and next thing you know you are over your head. You especially don't want to be in that position with young kids.

I would personally focus on other ideas to make money to increase your cash position before jumping into a real estate investment purchase. Yes it does take money to make money, however, money is not the only way to make money. You can trade talent, skills, time, expertise for money. I would focus on how to increase your cash position given your situation, skills, time and expertise, then once you are in a better cash position, jump in to real estate. There are a lot of pitfalls in real estate, especially when starting out. And usually it takes more money to get out of those pitfalls.

I wish you the best.

I don't mind risk at all, but it has to be balanced. 

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