Getting Started with little savings

18 Replies

Hello BP folks!

I'm very new to the community.

I joined Bigger Pockets not too long ago and am trying to get into buy and hold. I like the idea of reliable monthly cash flow. My starting goal is to have a steady cash flow of a couple thousand in around two years.

I have about $8,000 in savings, some credit card/student loan debt that should all be paid off by next year. I make a decent salary doing work in technology sector, but my instinct tells me that I should pay off my debt before owning my first investment property. I've never owned a home but have taken a few real estate courses in the past.

I've just begun looking for deals and properties in the jersey area (I live in NY). My question is has any one had any success with turn key (tenant included) properties? I'm thinking turnkey is a good low risk way to start out, since they are likely already managed and proven as rentable spaces. I'm open to any advice you can give me!

Great to be here! Thanks!

@Natalie Olivo  ,

Welcome to the community!

Maybe someone in New York will chime in later to answer in detail but for me i save up 20k to buy my 1st rental, and my area is cheaper compare to New York.

I don't want to scare you off but thing could go wrong in this business. make that you don't spread yourself out too thin and always have a good amount of cash reserve in the bank for emergency. I am always prepare to have no rent for my rental for 6 months and i would still be fine.

Good luck on your 1st property!

Promotion
Apartments.com
List, Screen, Lease, Get Paid, Manage.
No Better Place to Lease Your Place
Owners rely on the #1 rental site to get the best results from their rental properties.
Get Started Now

There are different ways you can get into your first property here in the NYC area. Yes overall our barriers to entry are some of the highest in the country however I see that as a good thing. If everyone could easily get into it then chances are its not worthwhile. Consider an FHA loan where you only have to put down 3.5% or other means of putting less than 20% down for owner occupied and avoiding PMI if you can.

I personally love saturated markets because they don't allow you to add to the inventory easily which can dilute your investment over time.   NYC is one of 8 major cities around the world where people want to be and consider a safe bet for investment.   It will always be that way.  No other city has the international appeal that this area of the country does.  

That doesn't mean that there aren't great places to invest and live around the US.  There are.   I just prefer this area.  Texas has my attention  as well.  

@Natalie Olivo  I was recently in a similar situation as you.  Paid off all my student loan debt first last year.  I'm almost at the point now where I can seriously consider investing in my first property.  I joined BP a few weeks back to start the researching process.

Having that debt cleared away was a huge relief.  Not only does it help financially, it's a huge psychological boost.

Best of luck to you moving forward!

Originally posted by @Natalie Olivo :

Hello BP folks!

I'm very new to the community.

I joined Bigger Pockets not too long ago and am trying to get into buy and hold. I like the idea of reliable monthly cash flow. My starting goal is to have a steady cash flow of a couple thousand in around two years.

I have about $8,000 in savings, some credit card/student loan debt that should all be paid off by next year. I make a decent salary doing work in technology sector, but my instinct tells me that I should pay off my debt before owning my first investment property. I've never owned a home but have taken a few real estate courses in the past.

I've just begun looking for deals and properties in the jersey area (I live in NY). My question is has any one had any success with turn key (tenant included) properties? I'm thinking turnkey is a good low risk way to start out, since they are likely already managed and proven as rentable spaces. I'm open to any advice you can give me!

Great to be here! Thanks!

 Hi Natalie,

There are some great cashflow markets in upstate NY where you can secure properties very cheaply and get an awesome cap rate.

These types of markets and properties are very time intensive as they are situated in a lower socio economic area.

Well done on saving the $8,000.

Before I became a full time investor I worked as a laborer and it took me 4 years of very hard work before I managed to save a decent deposit ($40,000) to kick start my real estate venture.

IMO you will need a bit more capital to get cracking but until then keep living and breathing real estate and ask questions or other investors that are already where you want to be.

Thanks for reading and have a great day.

@Michael L. Thanks for the positive encouragement! I've been looking at smaller towns in Philadelphia (relatively easy to travel to) for flip and/or buy and hold opportunities and crunching numbers to get into a comfort zone for the right deal. I feel confident in being debt free by late this year. That will give me the confidence to be more aggressive in pursuing something. With that said, I don't want to pass up opportunities that may come along, especially if the numbers are right!

@Engelo Rumora

Thanks for the advice. I've been researching and collecting information for when I am ready. I am apprehensive about investing until having a nice cushion to support the risk involved. Do you mind sharing what your first investment was like?

Hi @Natalie Olivo - Welcome to BP! Myself being new to real estate investing, I have learned a ton from this wonderful community.

Definitely read the BP new investors's guide; it will teach you the basics to get you started. Also, stay active on the forums and network with other investors. I would say networking has taught me more than anything else.

Originally posted by @Natalie Olivo :

@Engelo Rumora

Thanks for the advice. I've been researching and collecting information for when I am ready. I am apprehensive about investing until having a nice cushion to support the risk involved. Do you mind sharing what your first investment was like?

 Hi Natalie,

No problem at all.

I bought my first property in Australia.

Paid $150,000 and renovated it myself for around $12,000 and refinance and pulled out equity $30,000 to repeat the process.

I built quite a large portfolio in a short time but decided that it wasn't a sustainable way in building a long term portfolio.

These days I do everything with cash and only buy in sold B class areas. Once I feel there is enough cashflow coming in every month from my rentals I wall start to look at higher risk investments and using leverage.

Thanks and have a great day.

@Darren Sager

Thank you for your guidance! I will certainly be educating myself on FHA loans.

I had a friend recently tip me off to a flip opportunity. $5,580 down would give me a $300 mortgage on a 3bd 1 bath, 3 story Colonial. Looking briefly at the comps, the last several homes in that area sold for 4 times that. I don't specifically know the repairs required for the home, but I anticipate that any major structural repair would start at a couple thousand dollars.

Even before checking in with the realtor on the state of the home, the deal seems risky for me. Say I'm lucky and the repairs ARE <2000, I'd still be responsible for a couple months rent at least and be extremely pressured to sell within a few months.

Ideally I'd like to have more of a buffer before jumping the gun. But I'm sure there are some that wouldnt mind the risk.

Promotion
REI Nation
Premier Property Management Group
Premier by REI Nation is the #1 PM Choice for Passive Investors
Looking for worry-free property management? Check out our Ultimate Guide to Property Management.
Download Now

Hey @Natalie Olivo  welcome! Definitely start jumping into the community here! Be sure to read through The Ultimate Beginner's Guide to Real Estate Investing to help you get started.

Finally -be sure to setup some keyword alerts - especially for "Bellerose" so you can jump into local conversations.

See you around the forums!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you