1. Be willing to work and sacrifice comfort if necessary.
2. It is not that hard to find "livable" houses right now for 10 or 15K. Even less.
3. If you are short on money then move in the house yourself while it is being fixed up. Many houses are really just dirty and need new carpet and paint.
4. Then sell or rent out the house and you are on your way for less than the cost of a new car.
Can't find deals like that? Look harder. I even have one posted on this site and there are many others. SEE NUMBER 1
Stanley, when I saw the title of your thread, I thought you were going to say wholesaling.
You are right in your approach. This is a good way for a person without a family to go. Or even some couples. if they are on the same page.
A similar way is to get an FHA mortgage on that starter property. Low down and low interest. Some credit needed.
Thank you for posting this @Stanley Crawford ...unfortunately, that much work/sacrifice doesn’t appeal to a lot of people.
James you are right of course. I am just trying to point out it can be done for a lot less than the price of a car.
NOTE: I myself to not move into rehabs myself but I do camp out in them for a week at a time.
That is some solid advice for those who are willing to put in the work and make the sacrafices of moving from place to place. You would also have to be in an area where homs sell for less than the price of cars and that is not in all parts of the country, so if you live in a place like Los Angeles, then you better find a new path or move.
Good advice. Unfortunately, most will read you title and think (as I did) very little money is equal to about 500 bucks. Anybody with 10-15K has several entry options. I might argue that Jon K. points out a better alternative for overall value and long term gain for someone with limited time and money looking to invest who also has the wherewithall (JOB) to save 10-15K.
That being said, my first (and so far only) investment deal was 12K cash and rehabbed with another 12K in consumer credit. Its renting for 550/month, so not a bad start. But, in the long run, the house I pay a mortgage on and live in will likely create more value for me once I move and convert it into an investment property.
It took me two years to save up and find my first. It will probably take two years to pay my debt and save enough for the next. Hopefully the time scale will accelerate after number two (and after wifey gets out of college and starts adding to the "fund" and maybe if I'm lucky, I'll be making more coin at my day job, too).
Also, I laughed a little at Will's comment. Even here in Texas, I would not want to live, or subject my wife to live in our rental property while we rehabbed it. I wouldn't have camped out in it either. those types of deals do have to within a 20 mile radius of my house, though. Then I can camp out in my own bed. I rehabbed a little cargo trailer so all the tools push into the garage at the same time. Such portability with simultaneous security of tools eliminates the need to stay at the rehab property. It did cost $700 to acquire and fix up the trailer though...
Everything you say is true. But the point I was trying to is most everybody reading has enough money/or access to enough money if they are willing to sacrifice some comfort for a short period of time. I have bought 5 houses in the last 14 months all were less than $7000 and all but 1 could have been occupied at closing.
Stanley I completely agree with your approach but unfortunately (as will pointed out) I live in Los Angeles where you would not be able to find a house for 15K. What would you suggest I do? Look out of state?
Originally posted by Stanley Crawford:
1. Be willing to work and sacrifice comfort if necessary.
I don't agree with everything in your post, but this item certainly applies to everyone. The question is how much of your current life do you want to sacrifice to have a nicer lifestyle later on. Everyone has different priorities in life.
Saving is definitely helpful, but it won't replace investing well and having the work ethic to start a venture that will make you money in proportions much larger than what you can trade your time for. Some of the deals I am working on now will replace a nice engineering salary for a year with 2 or so deals. Other larger CRE deals we are targeting will make me a large multiple of that same salary annually too.
Don't starve yourself or sacrifice your family's safety chasing a few more bucks. There are things more important in life than money.
This is exactly what i'm trying to do! I'm 21 and make 8.90 an hour I've saved up 14k in the last year and a half and i'm wanting to find a really cheap foreclosure, fix it up then rent it out then start the process over again, hopefully saving quicker from the rental.
Originally posted by @Jon Holdman :
Jon Holdman somehow your 4 letter response carries more weight than someone else's 400 work response.
Gives me an idea for a new topic...
That is definately a flaw in the system Jon K., but what system is perfect, right!
Look forward to your new thread.
I have more than 20 words in this post, I guess no votes will come in.
Since graduating from college in 1981, I've moved to Houston, then Bakersfield, now Denver. The first two because that's where the job was and then the third to get out of oil and into computers and live in a nicer area. All three, though, come down to trying to improve my life situation. For any particular sort of work, you may find better prospects in some area than others. You may just have to pack up your stuff and move to a hotter area if your desired work isn't available where you are. That applies to real estate as much as oil or computers.
Sorry, @Will Barnard wasn't trying to hijack your answer. You had already mentioned moving.
No problem Jon, two heads are better than one!
@Will Barnard i wasn't pointing fingers. My responses tend to be brief and the opposite of comprehensive, which is what is called for sometimes. And sometimes four letter words are appropriate.
The thread I was inspired to start was on moving for REI opportunities.
Great post! I am currently in the middle of doing this! 10 to 15k is probably doable around my area, but I couldn't find my bulletproof vest when I purchased, so I picked one up for 72k in a better area and currently living in and remodeling. The forclosure had burst pipes so it turned out to be a more extensive rehab, but for all the extra work I have had to put in I am still only a few thousand over budget, which I am actually pretty happy with. The extra money turned out to go towards outragous building permit costs I didn't account for (and the fact that I needed a licensed plumber to do the work according to the city when I planned on doing it myself). Learning a lot though!
You definitely have to be willing to sacrifice! My mother has anxiety whenever she stops over at the construction mess I live in, but apparently I'm not too picky with my living standards right now...
I went FHA and my year is up in august. Actually got a 203k loan with 10k rolled into the morgage to cover most of the rehab costs. I still have quite a bit of work left but I am itching to get another property soon, which I plan on purchasing with my lottery winnings. Can't win if you don't play, right?
@Stanley Crawford & @Jon,
You guys are inspirational. Thanks for sharing and wiping out my excuses. I can't work Stanley's numbers in Sacramento, but I probably could be more creative.
but its closer to LA
Not quite $15k but kinda close
Moving is a great option if you can make it happen. Go to where the deals are if you have to invest out of state and you don't want to do that. This is actually one of my plans since my future job will let me move anywhere in the US.
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