All Forum Posts by: John Blackman

When you have your own money at risk you take more accountability. When you have someone else's money at risk, you take on even more responsibility. With less than $10k, the key strategy that comes to my mind is wholesaling. K. Marie Poe has the right idea.

I regularly do deals now with $10k or less. However I didn't start that way. I had to risk some cash to do my first deals. Once I made some money, friends and investors were willing to risk some money. Once I gave them a double digit return, their bank accounts are now open to me because I can make them more money than they can with retail investments.

1) Wholesaling is a great strategy that doesn't take much money. It does take time though. This is harder to do with a full time job but not impossible. As a developer I am happy to buy wholesale deals. The spread they cost is worth it to me. I don't have that time and as long as I can make my numbers work, I will buy wholesale deals all day.

2) Once you've got some cash there is a world of options. If you start flipping or developing, you're likely going to have to get hard money partners, or slow financing to get your first deal done. That's ok. You'll sweat bullets making those payments. Plan your financing costs in your budget and make sure you can pay for them in addition to repairs. Count carrying costs while you're selling the property. Add 10% to that so you will sleep at night. You might think that you won't make as much, but your sanity is worth it. You don't have to knock every deal out of the park. If you deliver on what you promise to people (contractors, lenders, investors, realtors, buyers), then more deals will just start showing up. You'll learn and get more efficient.

3) Once you start making money for your investors, then the money comes to you by itself. My day job is in software development, but I am not a fan of finding investors over the internet. Every single investor I have I have a multiple year personal relationship with. I have met a few on the internet, but none have invested until I have gotten to know them personally. YMMV.

Once you start using other people's money you are getting into some tricky territory. You need to be very careful. Friends and family are not likely to sue you, but you are in effect selling a security. That is an entirely separate topic for another post.

The above is simply my experience and certainly not a hard fast set of rules. I'm learning every day and my response a year from now will probably be different.

Good luck, pad everything by 10%.

Well I like to think of myself as the little Luke on your shoulder keeping you on the light side. :)

Hi everyone,

I've been a member of this site for quite some time but not active. Today I attended a terrific biggerpockets real estate gathering in Austin. It was a terrific event and I met several investors operating in Austin, all of whom are up to a variety of real estate strategies.

This has finally prompted me to get active on this site, as it seems all of the smart kids are here.

I have been investing in Real Estate only since 2009 which is 4 years but doesn't feel like very long. The primary strategy the team I work with in Austin pursues is single family housing development in gentrifying areas of Austin, TX. Bryan Hancock and Jon Klaus have been bugging me to get active here, and I'm finally following through.

I'm looking forward to contributing and learning from this gathering of great real estate minds.

John Blackman

Once you purchase you are going to be committed and the transaction costs will loose you money if your investment doesn't work out.

Everyone has different risk tolerance, but I would personally not own any rental property as my first buy and hold that I did not live near (< 1 hour drive). Ideally you should know the market you are buying in very well. Network with realtors and other investors that have performing properties in the area you are thinking about purchasing in. Once you see 5 or 10 working properties you'll have a higer confidence that buying in that market will have similar results.

The above is a very shallow response to your query however. There are appreciation concerns, tax implications, return calculations based on your financing, and management issues just to start.

Steve has the right advice. Find a mentor with experience in the type of investments you are looking at. A local mentor is key. I have several and they have saved me a countless number of times.

Good luck.