How do I invest in real estate with 20k

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Cassi Justiz
Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes
6y

Hey @Robert, (for some reason it's not letting me tag you!)

It depends on what your goals are. Do you want to get into your local market or are you looking out of state? Do you currently own your own home? 

If it's possible in your situation, I would buy the cheapest house that you would be comfortable living in (SFH or multifamily if possible). Put as little down as you can to make the cashflow numbers work. Spend the next year living in it and remodeling it to get it up to high end rental market standards. After a year or so, you can move out, rent it out and keep your nice owner occupied loan.

If that isn't practical for your situation, then I would recommend buying a nice turn-key style rental somewhere in the Midwest. There are plenty of markets where you can get a 70k house that exceeds the 1% rule. Even with 20% down, you should be able stay under 20k out of pocket and still have little extra to hold in reserves. 

Good luck! 

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  • Andrew PostellPro Member
    Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
    6y

    @Robert Dennehey $20k could be enough...based on what you want to do though.   If you are still searching for that answer then try the "starting out" forum and keep doing research.  You'll find the right direction for you out there.

    2Reply
  • Clint ShelleyPro Member
    Surveyor · Dothan, AL · Member since 2014 · 425 posts · 391 votes
    6y

    @Robert Dennehey

    Yes. Get portfolio loan on a 40-50k house that needs cosmetic work. Use your 20 to rehab. Refinance updated property into long term debt. Get as much money back as possible. Donut again.

    Clint

    1Reply
  • Christopher Henderson
    Investor · Member since 2019 · 2 posts · 0 votes
    6y

    buy a 60-80k home in a midwest city. 20%down+reserves. you will have positive cash flow.

    0Reply
  • Noah Chappell
    Investor · Minneapolis, MN · Member since 2016 · 254 posts · 228 votes
    6y

    I would try to BRRRR or house hack. You may not come out positive on your first deal, I'd be satisfied breaking even with a good stabilized property in the end. In a few years if you find your return on equity isn't great you can always sell or exchange (tax free if primary residence for 2yrs or 1031) & move it somewhere more productive. I'd say main thing is jumping in while paying attention to fundamentals of deal analysis, & you're likely to do just fine.

    1Reply
  • Cassi Justiz
    Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    Hey @Robert, (for some reason it's not letting me tag you!)

    It depends on what your goals are. Do you want to get into your local market or are you looking out of state? Do you currently own your own home? 

    If it's possible in your situation, I would buy the cheapest house that you would be comfortable living in (SFH or multifamily if possible). Put as little down as you can to make the cashflow numbers work. Spend the next year living in it and remodeling it to get it up to high end rental market standards. After a year or so, you can move out, rent it out and keep your nice owner occupied loan.

    If that isn't practical for your situation, then I would recommend buying a nice turn-key style rental somewhere in the Midwest. There are plenty of markets where you can get a 70k house that exceeds the 1% rule. Even with 20% down, you should be able stay under 20k out of pocket and still have little extra to hold in reserves. 

    Good luck! 

    2Reply
  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    6y

    @Robert Dennehey

    $20,000 is enough of a downpayment on a househack at 5% down.

    It may also be good enough on an investment property at 20% down in certain areas.

    With that said - downpayment is not the only requirement to acquiring an investment property with a mortgage. You may need verified income and a decent credit score.

    [email protected]917-280-8544
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    1Reply
  • Robert Dennehey
    OP
    Minneapolis, MN · Member since 2019 · 7 posts · 1 vote
    6y
    Originally posted by @Cassi Justiz:

    Hey @Robert, (for some reason it's not letting me tag you!)

    It depends on what your goals are. Do you want to get into your local market or are you looking out of state? Do you currently own your own home? 

    If it's possible in your situation, I would buy the cheapest house that you would be comfortable living in (SFH or multifamily if possible). Put as little down as you can to make the cashflow numbers work. Spend the next year living in it and remodeling it to get it up to high end rental market standards. After a year or so, you can move out, rent it out and keep your nice owner occupied loan.

    If that isn't practical for your situation, then I would recommend buying a nice turn-key style rental somewhere in the Midwest. There are plenty of markets where you can get a 70k house that exceeds the 1% rule. Even with 20% down, you should be able stay under 20k out of pocket and still have little extra to hold in reserves. 

    Good luck! 

    We have a house with 135k equity. I currently have a young family with two children. my first thought is BRRRR. Buy a cheap property on a Heloc and hold the 20k for unplanned expenses as I am new at this. What are your thoughts on this strategy?

    Thanks!!!

    0Reply
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