New Member - New Investor

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  • Ken M.
    Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
    6mo
    Quote from @Eric Titlow:
    Hey everyone, I’m finally making the leap after YEARS AND YEARS of making excuses not to. I’ve read all the books, watched all the YouTube videos, read all the podcasts, but I alway talk myself out of it. I’ve finally lost my last nerve with corporate America and I need something different in my life. My question for the community is, should I continue saving and go the conventional route to build a STR portfolio or is private lending less scary/risky than it seems. My W2 brings me well over six figures in a low cost area, but I’ve paid off a lot of stuff in the last six months to decrease my DTI and make up for some stupid things I did a few years ago. Credit isn’t a problem, but I don’t have the funds for a downpayment and rehab. Now that I’ve made my past mistakes go away, I could probably save up over the next year to go the conventional route, but that gives me another year to talk me out of something I’ve been pushing myself to do for years. Thoughts?
    Congratulations.
    But, you'll need money no matter which way you go. I teach no money down type of stuff, but you still need money for the seller, closing costs, holding costs, reserves, taxes, repairs - that kind of thing. Anyone that says you don't need money is telling you a Oklahoma sized whopper. 

    There are some great ways to cut some of those expenses, but you still need some money to make it happen.

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    • Eric Titlow
      OP
      Member since 2026 · 14 posts · 9 votes
      6mo

      @Ken M. Thanks for the reply. Currently have about $15K, but I have a feeling that's not enough to get the ball rolling. My W2 could absorb the holding costs, but where I feel I'm lacking, even in a "no money down" type situation, is rehab. I'd have to find a turnkey property, preferably one being offloaded by an investor with a renter already in place. 

      1Reply
    • Ken M.
      Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
      6mo
      Quote from @Eric Titlow:

      @Ken M. Thanks for the reply. Currently have about $15K, but I have a feeling that's not enough to get the ball rolling. My W2 could absorb the holding costs, but where I feel I'm lacking, even in a "no money down" type situation, is rehab. I'd have to find a turnkey property, preferably one being offloaded by an investor with a renter already in place. 

      I wouldn't chase pre-foreclosures unless you have enough to bring the loan current, bring the taxes current, pay the seller some equity, cover the mortgage payment for 6 months, rehab the house, go through closing, pay for insurance, and so on. Normally a Hard Money Lender (HML) will lend about 80% of the value of the property but you have to have a track record and 20% of your own money to get 12% to 15% interest and 4% or 5% to him. It's expensive to buy pre-foreclosures.

      A better way is to buy using creative financing (it looks like a mod took down my comment ) but we're allowed to discuss that information in DMs not forums.

      Anyway, there is a way to do what you want with the amount you have, you just need to be shown how. 

      ADDED: I just realized I was answering a question a guy over in New Orleans had. :-) Silly me. Anyway, the information is still good, just not specific to your question.

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    • Eric Titlow
      OP
      Member since 2026 · 14 posts · 9 votes
      6mo

      @Ken M. Haha I was wondering why you mentioned foreclosures, but I do apppreciate the response either way. I agree there has to be a way, I just have to figure it out. The more time I spend in these forums, the more I realize I don't know, and that's after probably 5 or 6 books and hundreds of hours of podcasts. This is why I just want to DO IT. I know it's a different world once I'm in the trenches versus speculating on the sidelines. 

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  • Steven GlickBusiness Member
    Lender · Buffalo · Member since 2024 · 115 posts · 33 votes
    6mo

    Eric, You're already ahead of most just by being ready to take action. You're actually in a strong position high income, clean credit, and low DTI is what lenders want to see.

    With $15K, jumping straight into an investment property will be tight, but owner-occupied options (FHA or low-down conventional) can get you in much sooner without waiting a full year.

    On private lending it’s not risky if used right, but it’s short-term and more expensive, so it really only works when you have a clear exit like a refinance.

    The bigger risk here honestly isn’t the loan type it’s waiting too long and never getting started.

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    • Eric Titlow
      OP
      Member since 2026 · 14 posts · 9 votes
      6mo

      @Steven Glick Thanks, Steven! Unfortunately, moving is not an option right now, so the owner-occupied route is off the table. It sounds like my options are either A) find a deal that offers nearly instant equity without much upfront capital (underpriced turnkey, maybe?) so I can refi and pay back the private while still maintaining positive cashflow. Or... same scenario and be willing to part ways with some or all of my $15K on something that isn't necessarily a turnkey, but maybe requires very little rehab. I can recoup the $15K relatively quickly with my W2, so I'm not married to the idea of hanging on to it. 

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  • G. Brian DavisPro Member
    Investor · Hatboro, PA · Member since 2016 · 3k+ posts · 886 votes
    6mo

    Hi @Eric Titlow welcome!! Nice to meet you here on BP! Another option is to split the difference, start small now (lending or passive deals), and keep saving toward an STR later once you've got momentum.

    0Reply
    • Eric Titlow
      OP
      Member since 2026 · 14 posts · 9 votes
      6mo

      @G. Brian Davis thank you! That's the option I'm leaning towards just to get some experience under my belt. I don't need my first one to cash flow right away. I really don't need any homes to cash flow as long as I have my W2, but the goal is to get away from the W2 and never ever ever look back. 

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

    @Eric Titlow

    hello and welcome.  i had a few reactions to your post, and then I'll also add some of my standard responses for new investors.

    -yes, private lending is very risky.  it's not a beginner strategy, period, full stop.

    -you don't have enough to get started.  so... you'll need to save up more.

    -if you can't move and house hack, that's totally fine.  but house hacking is a lower risk (not no risk, but lowER risk way to get started), and so if that's not an option for you, then that lower risk way to get started is unfortunately off the table.

    -the market is very, very challenging for new investors right now.  this cannot be overstated, and most people who say otherwise tend to be selling something.  prices are high, rates are high, and there is tremendous demand for inventory by everyone - so retail buyers and investors are now competing for the same inventory.

    -LTRs don't 'cash flow' for several years, at a minimum.  we see forum posts over and over and over by folks who buy LTRs and then whose expectations weren't met, as they overlook all the costs associated with owning: closing costs, holding costs, turnover costs, maintenance costs. hopefully with all the research you've been doing you're familiar with these but it always was, and is getting increasingly, ludicrous for anyone to say that anything will 'cash flow' in the first year. or even the first few years.

    not trying to be discouraging, just realistic. i would be happy to connect / answer any additional questions you have.  i champion no niche and advocate for no market or strategy.  i am on here in part to help new investors not lose money.

    0Reply
    • Eric Titlow
      OP
      Member since 2026 · 14 posts · 9 votes
      6mo

      @Nicholas L. thank you for the response. I definitely don't want anyone feeding me empty motivation just for the sake of being encouraging. It's always different to see the different responses as some will say "If you want it badly enough, there's always a way. You just have to figure it out". Meanwhile, there's others whose main goal is to help others manage their expectations and I greatly appreciate both approaches on here. 

      1Reply
  • Jarret Jarvis
    Real Estate Agent · Chicago · Member since 2021 · 178 posts · 64 votes
    6mo

    Eric, Congrats on pulling the trigger after all that prep. Private lending can work but it’s riskier than it looks: higher rates, short terms, foreclosure exposure if the borrower flakes, and you’re still dependent on deals finding you.

    With your W2 and low DTI, go conventional for a house hack, save that year, build equity fast, and own the asset yourself. You won't talk yourself out if you commit to weekly market analysis now.

    0Reply
    • Eric Titlow
      OP
      Member since 2026 · 14 posts · 9 votes
      6mo

      @Jarret Jarvis House hacking is not an option. After speaking to several people on here and other places, it looks like I'll be saving a few more months and go the conventional route on a turnkey property. 

      0Reply
  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    6mo

    It depends what you're looking for but it's going to be very difficult to build wealth just with private lending. there's no benefit of leverage like you get with real estate that can either drastically hurt or amplify your return. My vote would be real estate and then you can get into private lending later. 

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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    6mo
    Quote from @Eric Titlow:
    Hey everyone, I’m finally making the leap after YEARS AND YEARS of making excuses not to. I’ve read all the books, watched all the YouTube videos, read all the podcasts, but I alway talk myself out of it. I’ve finally lost my last nerve with corporate America and I need something different in my life. My question for the community is, should I continue saving and go the conventional route to build a STR portfolio or is private lending less scary/risky than it seems. My W2 brings me well over six figures in a low cost area, but I’ve paid off a lot of stuff in the last six months to decrease my DTI and make up for some stupid things I did a few years ago. Credit isn’t a problem, but I don’t have the funds for a downpayment and rehab. Now that I’ve made my past mistakes go away, I could probably save up over the next year to go the conventional route, but that gives me another year to talk me out of something I’ve been pushing myself to do for years. Thoughts?

    With $15k to start, private lending isn't going to get enough return to grow fast enough to something scalable/big enough for "financial freedom" - should definitely go the house hacking/BRRRR route to start building up a portfolio

    [email protected]
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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    6mo

    @Eric Titlow

    If you want to invest in private money, yet you need to control this impulse, because the early involvement in private lending will lead to financial losses after you achieve professional success and active business operations. The most secure way to build your wealth is through actual work that will help you achieve the goal of saving enough money to purchase your first property. Your first property investment should include a house hack or basic rental property as your entry point into real estate. Your first deal should not reach perfection because it has already delivered you a valuable first entry point which you can handle.

    Good luck!

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