Investing in real estate with a low income

Investing in real estate with a low income

Whittier, CA · Member since 2016 · 5 posts · 4 votes

First of all, i will like to introduce myself. My name is Adrien, i'm a french / american, i have dual citizenship.  I was born in the US, but lived in France my entire life. 

I left everything to try out America, but the life in california is so expensive... I'm currently having a very low income, 14$ per hour. But i managed to save drastically. I eat very cheap food ( Canned food & frozen vegetables), i live in my dads house so i don't have to pay rent, i just help with water, electricity bills, buy my own food, help doing tasks in the house.

In two years i managed to save 30 000K.

The most important part ( you will understand later), is that i miss Europe freedom, since i moved to the US, i feel like there is less freedom here, less rights citizens & worker rights, less protection in jobs, extremely expensive medicine, extremely expensive insurance ect. 

Huge difference on vacation time aswell, in the US 2 weeks paid vacation, in France 5 weeks, 12 days of RTT, plus 16 banks holidays ( if you had everything up its a total of 2 months in a half vacation per year. ) Plus if you are sick you still get paid while your home , if you a prescription from the doctor...

I also miss the lifestyle, bringing beers to the beach with my friends, bars that dont ask your ID, activities, Europe is so small that you can go to one country to another so easily and travel cheap ( Bus to go to Spain, Train to go to italy ect ).

There is also some magnificent places in the US, i'm in love with San Francisco, Yosemite, Grand Canyon, Mont Whitney, San Clemente , San Diego ect But we have such a low numbers of days for vacation here, that i can't do much.

I was going to go back to France, but the economy is so bad right now, that i won't find a better job anyway.

My ultimate goal, is to be financially free. After searching all the ways to obtain freedom, i realize that the best way was real estate. You can do so much, i started reading about it, and just fell in love with this theory, that buying several houses that produce cash flow, gives you a semi-passive income. That's just perfect ! I could be living anywhere in the world, have a good property manager in every states i'll invest and don't have to worry too much, right ? So here i am, i subscribed in BP moving further in the process.

I planned to travel a bit everywhere, in the US, in europe, in asia , australia ect, i wanted to find a job and work locally to get extra money, added to a passive income from real estate to help me out.

My plan is to obtain from 3000$ to 5000$ in net semi-passive income in . So i can work in any job in the world while traveling, even if it is a low paying job, i will still have 3000$ Coming each months .

I'm going to need some help from experienced people, as i explained, i have a low income, and a small capital to invest. Is there any places you will recommend me to invest ? ( 30 000 $ in bank, i can borrow another 30 k from my grandpas retirement but will have to pay him back, and earn 24 000$ a year). I have an excellent credit score, 730. I have absolutely no experience at all in real estate, but i'm very interested and motivated.

I'm looking to either put everything in one multifamily house in a appreciation area, or get two cheap houses in cheap areas like Memphis, Detroit ( i know its risky, but its the best cap rate i've found), somewhere in Florida ?...

Does someone have any idea of how i can start investing ? & Where ?

I was thinking to not use the cash flow, and keep it in the bank, so i can reinvest the cash flow in another property. I give myself 2 years for 3000 $ or 5 years to get 5 000 $ Net income.

If you have any questions please do not hesitate. I'll be glad to answer them.

In hope that someone will help me realize my dream.

Best Regards,

Adrien

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
9y

I just want to congratulate you on being able to save $30k while making $14 an hour. That is a very nice accomplishment.  There are many people who do not think it is possible to save large sums of money when you dont make much, but you are a prime example that if you want it badly enough you can make it happen.  I was in a similar boat as you when I got out of college....low paying first job, but I knew saving was going to help me down a path to a better life.

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  • Investor · Tampa, FL · Member since 2015 · 175 posts · 75 votes
    9y

    Hello @Adrien Veres

    You came to the right place! You will find great people and information in the Bigger Pockets community. We specialize in turnkey investments and property management in the Detroit Metro area, so if you have any questions in that area just let us know.

  • Investor · San Diego, CA · Member since 2015 · 111 posts · 34 votes
    9y

    Hi Adrein,

    Welcome to BP!  Yes, having lived in Europe myself, I understand your nostalgia and sentiment.  I lived in Germany for a while and appreciate the strong social safety net and lengthy vacation times.  I am also a California resident and, as it is, we are probably in the most European-like state for social programs and such.  Perhaps you can take some solace in that.

    The trade-off, though, is that very few Europeans can retire early by way of financial independence.  The system, as I see it, is structured for long-term employment with generous benefits and retirement.  That's nice, but you'll still be working until your 55 or 60 at the earliest.  I believe the retirement age in France is around 60.

    In the US, I find it far easier to achieve financial freedom for several primary reasons.  The cost of living is generally lower here, even in California, so that you can live more frugally and save more of your earnings.  There is also a more mature credit system that allows greater borrowing and leveraging for real estate investments.  In Germany, it was unheard of for people to invest in real estate given the general 50% down payment requirement.   The salaries are also much higher in the US, especially in coastal California and particularly in San Francisco, so that you have more earnings to save and invest in real estate.  Yes, I understand that medical and educational costs are far higher here, but you can structure your life to mitigate these expenses. 

    You can save more of your earnings to invest in cheaper location, such as a regional state like Nevada or Arizona.  I know you've stated that you earn $14/hour, but with even this salary you can likely get a loan for a small rental in Tucson, AZ. 

    Ultimately, I personally believe that financial independence is easier on this side of the Atlantic.  I would rather be free in the 30s so that all of my time is "vacation", rather than the 2-3 months per year with a job.   Of course, the European culture and ambience is mighty appealing as well and difficult to quantify! 

    You may want to check our Mr. Money Mustache (www.mrmoneymustache.com).  He shows clear ways for anyone to achieve early retirement. You would probably need to relocate to a cheaper city since SF/OAK are so damn expensive. However, I live in sunnier, beautiful San Diego, and the costs are low enough to support financial independence ($1400/month rent versus $3500 in San Francisco). 

    Send me a private message so we can chat more.  You have a compelling story!

    Johnathan

  • Real Estate Agent · Detroit, MI · Member since 2016 · 82 posts · 52 votes
    9y

    Detroit is a great place to invest for income and upside potential. But make sure you have a good team in place.

  • Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    9y
    Originally posted by @Adrien Veres:

    First of all, i will like to introduce myself. My name is Adrien, i'm a french / american, i have dual citizenship.  I was born in the US, but lived in France my entire life. 

    I left everything to try out America, but the life in california is so expensive... I'm currently having a very low income, 14$ per hour. But i managed to save drastically. I eat very cheap food ( Canned food & frozen vegetables), i live in my dads house so i don't have to pay rent, i just help with water, electricity bills, buy my own food, help doing tasks in the house.

    In two years i managed to save 30 000K.

    The most important part ( you will understand later), is that i miss Europe freedom, since i moved to the US, i feel like there is less freedom here, less rights citizens & worker rights, less protection in jobs, extremely expensive medicine, extremely expensive insurance ect. 

    Huge difference on vacation time aswell, in the US 2 weeks paid vacation, in France 5 weeks, 12 days of RTT, plus 16 banks holidays ( if you had everything up its a total of 2 months in a half vacation per year. ) Plus if you are sick you still get paid while your home , if you a prescription from the doctor...

    5 Weeks of vacation... 12 days of RTT (whatever the hell that is..I don't even want to look up). 12 bank holidays..2.5 months of vacation in a year.  Sorry.. I don't understand it, and certainly don't understand those who say they understand it. And you wonder why French economy is in shambles? LOL. My family came to US from India twenty some yrs ago, and for sure we didn't come to the land of opportunity to sit on our a** and sip wine. We came here to bust our rear ends and work like a mule if that's what it took. 

    If you really want to realize your dreams, I suggest you get rid of this BS nostalgia right away. You really sound like a pitiful depressed housewife from those mid afternoon soap operas. Glad you were able to save $30K, but with a better paying job you would be able to save more, and actually able to smell a few roses along the way. You can't save your way to wealth.  Perhaps eat better food and even go to a nice steak house once in a while.

    In Podcast # 200 Josh and Brandon did 20 steps for real estate investors. And one of the steps is fixing your life before move on real estate investing.  Your life seems to be in order, but your attitude needs a little bit of tweaking. Before jumping into any RE techniques, that's where I would start. 

    Good luck.

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    I just want to congratulate you on being able to save $30k while making $14 an hour. That is a very nice accomplishment.  There are many people who do not think it is possible to save large sums of money when you dont make much, but you are a prime example that if you want it badly enough you can make it happen.  I was in a similar boat as you when I got out of college....low paying first job, but I knew saving was going to help me down a path to a better life.

  • Lee RipmaPro Member
    Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
    9y

    @Adrien Veres

    Life is tougher here than in Europe. You have to bust your *** to make it and you don't have a safety net. Under the new president there may be even less of a safety net. But if you can figure out how to do it, the sky is the limit. Remember, the rich don't pay taxes in America, the opposite of European countries. I'm not sure what your job is but maybe you could start helping investors in LA or doing something with real estate in LA. Maybe helping them hold open houses or do the setup for short term rentals. If you want to invest with 30k you're going to need to go outside of the LA area or get into a low down payment loan. You could perhaps do this in Boyle Heights or East LA. Best of luck to you! 

  • Member since 2016 · 143 posts · 157 votes
    9y

    @Adrien Veres  Congratulations on being frugal and saving so seriously!  I also grew up speaking French but was born in Louisiana. Like you I have never had a big salary.  I have always lived cheaply and managed to buy one house, then another, then another, and so on very slowly, paying cash for all except the first one.  So you can do it in any number of places across the country. Little by little you can do it. Good luck!

  • Whittier, CA · Member since 2016 · 5 posts · 4 votes
    9y

    I will like to thank you all for welcoming me in this community & giving me hope due to my situation !

    @Robert Syfert , There is a good chance that i will invest in Detroit due to the amount i have in the bank, Detroit could be a good choice. I will probably contact you via private message during the week for more information about the city, and neighborhood to chose, aswell as property management.

    @Johnathan Alesso Thank you for this huge answer ! I do agree with you 100%. I do not want to work at 65+, which is exactly why i've chosen to stay in america and try to save as much as possible to start in real estate. Concerning the cost of living, i think it depends the cities, i leave in whittier, close to los angeles and prices are extrendamous, way more than in the south of France, or Italy. The US tho is by far, a way better place for investments, especially real estate, the law is good for investors, and the return is much higher than most countries , if not the best country for real estate. I actually heard about mr money mustache, he is the reason why i desire to retire in my 30's, my goal is actually 35 ( so i have 12 years to accomplish that goal haha).

    I also started to invest in dividends paying stocks with some apps. I'm still learning but i try to diversify stocks income even tho i don't have much to invest, the return is still better than the money sleeping at the bank haha

    I will discuss with you in more details by private message :)

    @Brent Maxwell Thank you, i hope to find good people that i can trust via bigger pocket to help me find a good team in the case i invest over there.

    @Chinmay J. I totally understand your point of view on this. As i said, the vacation time difference is a statement, and the culture is different. I guess in France, people in general prefer to earn less but to get more personal time ( shorter weeks, vacation spend with children, more time for the wife ect). French don't really try to work for themselves, because it has a costs, and people prefer to work for someone else, so they don't have to take any risks. Myself i'm a risk taker, it's why i'm here. I don't judge people who like to be safe, because i totally understand. I do not think tho that the vacation time has something to do with the bad economy. I think the bad economy is due to the euro, that makes french products more expensive and more difficult to trade. Plus, the country doesn't really help investors and entrepreneurs that are by definition the ones innovating and creating the economy. Taxes are high when you employ people, plus it is really difficult to lay off workers, so some companies are afraid to employ, so the production is much slower, the unemployment rate higher, and power of consumption lower. Wells thats my point of view, im not an expert, so i won't debate on this. 

    I Don't think i sound like a " pitiful depressed housewife " , i just introduced myself to the community and tried to explain to you my background,what i want for the future and why i want to invest here to go back and live over there in the future...

    I do know that with a better paying job i will be able to save more, it is logical, exept i didn't find any long term job that were that better. As i said i live in my dads house, so i had to find a job around, i could find other jobs further but i will have to rent, income - rent = same or worse, i already calculate that, it's the only reason why i keep the 14$ per hour job haha Plus my job is only 10 to 15 mins from my dads house depending on the traffic.

    Don't worry i eat to the restaurant some time to time, but not too often. I actually think that my life is in order, and pretty stable... but thank you, i will get a look to #200 josh and brandon did 20 steps for real estate investors" it sounds interesting !

    @Russell Brazil I'm happy to see someone who understands my difficulties haha 

    At first it was hard, then it got easy to save up some money , i just cut all the expenses that were not necessary. For exemple i see that nice jacket, some part of me wants it, the other part says that even if a buy it i will wear it one time, and then put it on the side. Same for little gadgets on ebay, unnecessary food like cakes, 7-11 Vanilla french coffee ect. I still buy some time to time, but drastically cut off. Instead i invest it in the stock market, investing / real estate books, workout equipment, camping gears ( i just love camping and hiking). I still have aguilty pleasure tho, red wine from traders joes haha

    @Lee Ripma Thank you for your advice ! I agree, it's better to be Rich in america than in europe !! Also i'm looking to invest outside of california for several reasons. The first reason is the price, the second is the cap rate that is much higher in other states than around L.A...

    Will i need to do studies in relation with Real Estate to do this kind of job ? If you have any company in mind, feel free to tell me in private message so i can get a look.

    @David D Painter Your story is really interesting, it is exactly what i want to do !!! Buy a house, keep the income from it in an account, re invest it in another house, and repeat till i'm doing great. Well even if i "retire" i would still be able to continue as a hobby haha

    I just hope to have a very good deal as first investment, to help me support the rest, i can not count on my salary income, but buy cutting expenses, i think i will be able to do something. I would like to buy as young as possible, so i will be able to pay the mortgage as soon as possible ( hopefully).

    To finish i will like to thank everyone of you, who took the time to encourage & motivate me. I know that i want to do this more than ever ! After some hard work, i would love to be able to say one day that i've succeeded and that i will be able to build a family that won't need to worry about not eating well , having a place to sleep or to afford any hospitalisation / medicine in case of a problem.

    If you have any site or youtube videos to show me that can help on my project, i would love you to send me links by email. I love learning new things. After all, the best investment is in knowledge :)

  • Real Estate Agent · Detroit, MI · Member since 2016 · 82 posts · 52 votes
    9y

    The only real freedom comes from financial independence.

  • Rental Property Investor · Whittier, CA · Member since 2014 · 325 posts · 268 votes
    9y

    @Adrien Veres welcome! I also live (and invest) in Whittier, but as with many other southern california cities, it is expensive to get started. It isn't impossible, though. Consider a FHA purchase where your down payment can be pretty low.

  • Stephen FrancoPro Member
    Scranton, PA · Member since 2016 · 201 posts · 44 votes
    9y

    Welcome, I would love to help you!  I have some high cap rate properties, and some experience in using small upfront cash to buy several units.

  • Rental Property Investor · San Francisco, CA · Member since 2016 · 85 posts · 31 votes
    9y

    Hello Adrien, 

    First of all, congratulations on saving money. That alone is a huge step. I would go to REI groups near you and talk to as many people as possible to see what they're doing. I'm sure you're not the only person in southern California trying to invest in a very expensive and competitive market. Wherever you invest, make sure you have a CPA and a real estate attorney that you can call and speak to- both for your safety and for future properties. I would also start networking here on the website too, there's over 600K members here and we're all happy to share our stories- good and bad. Either way, best of luck in whatever your journey brings.

  • San Diego, CA · Member since 2015 · 273 posts · 226 votes
    9y

    @Adrien Veres Keep in mind that the less you can happily live on translates to the less you need to have a happy retirement.  Many people forget that it isn't just about investing an extra dollar now, it's also about not needing an extra dollar later.

    Congrats on your successes so far, on developing such great plans, and good luck with your future endeavors!

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