If I could make $5 I'd be happy.

Starting Out
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If I could make $5 I'd be happy.

Benjamin Ertl
Phillips, WI · Member since 2013 · 8 posts · 0 votes

I'm just starting out and have been reading about all the people you should have on your "team" to start investing: lawyer, lender, mentor, etc. While I can agree with all of this, at this point I would much rather be a small investor who does his own thing.

I'm a junior in college with limited funds -- if you haven't picked up that vibe already.

The idea of investing in raw land or in a mobile home interests me the most but it seems like there isn't much money to be made in that field due to the costs of maintenance, development, etc. Plus it seems like the cheaper the cost, the more risk and cost of repair.

What sort of initial capital would I need to even start investing? $100? $1000? $100,000?

I would love some personal stories of investors that made small investments and had some success with it. My mind is a sponge so any and all advice is welcome.

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Taylor Shapiro
Flipper/Rehabber · West Hartford, CT · Member since 2013 · 128 posts · 52 votes
12y

@Christopher B. I'm interested, as i'm sure your story could shed some light on the OP's question-

How did you buy your first investment property with no money? Was this a rehab or a buy and hold?

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  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y

    Welcome @Benjamin Ertl to Bigger Pockets from another investor from Wisconsin! There have been lots of posts regarding people investing with limited amounts of money. What exactly were you looking to accomplish?

    Podcast Guest on Show #29
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  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    12y
    Originally posted by Benjamin Ertl:
    I'm just starting out and have been reading about all the people you should have on your "team" to start investing: lawyer, lender, mentor, etc. While I can agree with all of this, at this point I would much rather be a small investor who does his own thing.
    I'm a junior in college with limited funds -- if you haven't picked up that vibe already.
    The idea of investing in raw land or in a mobile home interests me the most but it seems like there isn't much money to be made in that field due to the costs of maintenance, development, etc. Plus it seems like the cheaper the cost, the more risk and cost of repair.

    What sort of initial capital would I need to even start investing? $100? $1000? $100,000?

    I would love some personal stories of investors that made small investments and had some success with it. My mind is a sponge so any and all advice is welcome.

    @Benjamin Ertl ,

    What @Dawn Anastasi said is correct. There are plenty of ways to make money and money that you can do without using your own funds.

    [email protected]224-381-2660
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  • Benjamin Ertl
    OP
    Phillips, WI · Member since 2013 · 8 posts · 0 votes
    12y

    I'm looking towards relatively small investments. I love the idea of passive income which is why I'm most interested in long-term investments. I would prefer income through rent and the like, or through long-term appreciation -- buy low, sell high.

    Is it even possible to make an investment with $100? Maybe...

    0Reply
  • Christopher B.
    Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
    12y

    @Benjamin Ertl

    Welcome to the board. You have found an incredible ocean of information here at BP, if you're serious about investing then I highly recommend spending time scrolling through this website as often as you can.

    I got started in real estate as a junior in college like yourself so understand your situation. Your value, and what you can sell, is knowledge, work ethic, and enthusiasm. People don't expect a college student to have a good understanding of real estate investing, heck I'm 28 now and some people still think its a big deal I own 1 rental and flip houses.

    I didn't spend a dime of my own money on my first investment, it can happen. Pick a strategy, make yourself as knowledgeable as possible, and seek out the people locally that can help you make things happen (friends, family, mentors, etc).

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  • Benjamin Ertl
    OP
    Phillips, WI · Member since 2013 · 8 posts · 0 votes
    12y

    The idea of taking out a loan scares the sh*t out of me...probably because of all the school loans. I would feel easier spending my own money, but of course that means starting extremely small -- which means it would take longer to start making "real" money.

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  • Taylor Shapiro
    Flipper/Rehabber · West Hartford, CT · Member since 2013 · 128 posts · 52 votes
    12y

    @Christopher B. I'm interested, as i'm sure your story could shed some light on the OP's question-

    How did you buy your first investment property with no money? Was this a rehab or a buy and hold?

    1Reply
  • Benjamin Ertl
    OP
    Phillips, WI · Member since 2013 · 8 posts · 0 votes
    12y

    @Dawn Anastasi -- I'm glad to see another person from Wisconsin on here. I took a look at your website in your signature -- definitely looks like you've been doing well for yourself, have you considered making changes to your website to increase business?

    Just putting that out there for you to think about...

    0Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    12y

    With such low expectations of making $5, you'll be a success in no time!

    Now, if you need to eat and still go to school, ya need to set your sights a little higher I'd say.

    Speaking of raising your sights, look to the market as to what the demand is instead of picking something because you think it's cheap to do.

    You can do a deal on a $250,000 home with a grand in you pocket, so get the basics of RE first, then look to the market then to a strategy that fits a property and a seller's needs. Good luck

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  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y

    Thanks @Benjamin Ertl . I'm not sure how changing my website would help me increase business; right now I just use it as an information page. Maybe you can elaborate?

    Podcast Guest on Show #29
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  • Christopher B.
    Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
    12y

    @Taylor Shapiro

    3 F's, friends, family, and fools. Mine was family. Purchased a REO duplex with cash and renovated it. The forced appreciation by remodeling the property provided enough equity I didn't have to make a down payment when mortgaging the property. I paid the loan back in full and live I. I e side and let the other pay all debt service. Obviously this isn't a typically scenario because not many people are going to loan that kind of money interest fre

    @Benjamin Ertl

    Debt isn't good for sure, but don't be scared of loans just learn how/when to use them properly.

    0Reply
  • Michael Heisterkamp
    Arlington, TX · Member since 2013 · 62 posts · 11 votes
    12y

    Look at investing from a different point of view. Investing doesn't always mean you are out to make money. I would suggest you look into investing in your education. Find a local investor and help him/her out. You will learn vast amounts of information, learn how investors look at property, learn about what to look for and what to avoid, if you get in with a group that does flips or rehabs you will learn basic construction and maintenance things that will really help you out early in your REI career.

    I have just executed my first deal and with my experience with construction will allow me to save thousands of dollars fixing up the property to get it ready for rent. I look at investments from the point of view that you make your money when you buy the property not when you sell it. What I mean by this is that when you purchase a property, by targeting specific things such as vacant properties, estate sales, or distressed sellers you can target a lower prices that allow you to super charge your cash flows, build smart equity in the properties with out having to deal with working around tenants and have a good amount of equity in the property even before you make your first mortgage payment. The property that I am in the process of closing on I will have 30% equity in the property before I close on the property and should have close to 70% after I am done with the renovations. By doing this I can take the equity out tax free and use it to purchase another property and continue to rapidly expand my portfolio.

    0Reply
  • Margo Roberts
    Investor · Pleasanton, CA · Member since 2013 · 59 posts · 13 votes
    12y

    I just want to congratulate you, Benjamin, for even thinking about investing at such a young age. You will surely do well when you are starting out at a time when most young people are living for the moment. Just learn all you can to start. There's tons of free education as this incredible BP information. You will know when it is right to jump in. Start out small-you have time.

    1Reply
  • Sean Moen
    Investor · Sacramento County, CA · Member since 2013 · 104 posts · 20 votes
    12y

    Welcome Benjamin! I want to wish you the best of luck man. As a person in similar shoes, it is invigorating to see you and so many others with the determination to make it happen. Keep the fire burning man and good luck!

    0Reply
  • Steven J.
    Urbana, IL · Member since 2012 · 1k+ posts · 425 votes
    12y

    Offer to help out others, network, and continue learning from BP. BP is full of mentors who are willing to help.

    For awhile I was looking on Craigslist in the real estate jobs section seeing who needed help. As a college student you could find yourself in an ideal situation being a resident manager in an apartment complex, or a Realtor's assistant, or even just volunteering your time with an investor.

    It takes most investors quite awhile to earn anything once we get started so be patient.

    0Reply
  • David Krulac
    Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    12y

    @Benjamin Ertl

    Buy a house near campus and rent rooms to college students. Big money maker and you can live there for free and moderate the Animal House.

    You might have some difficulty getting a bank mortgage, but you could either search for seller financing or get a credit worthy co-signer, someone who loves you and maybe gave birth to you?

    1Reply
  • Jeff Greenberg
    Real Estate Consultant · Camarillo, CA · Member since 2010 · 2k+ posts · 1k+ votes
    12y

    I am not sure that I understand your statement

    "I'm just starting out and have been reading about all the people you should have on your "team" to start investing: lawyer, lender, mentor, etc. While I can agree with all of this, at this point I would much rather be a small investor who does his own thing." In this business you need to have a lawyer, perhaps a lender or private lender, a mentor and more"

    You obviously don't think that you can do it all on your own as you are seeking advice from BP. First thing you need to do is leave your ego at the door. Many people are successful without partners, but I would guess that none were without "team members". If you want all of a little pie or a little piece of a big pie is up to you.

    I talk to my REI club members about the assets you need to do RE investing. You need RE knowledge/Experience, Time, money/credit.
    If you have all three you are in great shape. If you are missing a piece or two, go out and get it or find someone that does have it. Do it alone or use the synergy of teaming up with someone else.

    I deal in commercial RE and I know that it is a team sport. I have brokers, lenders, investors, PM's, and trades people, on my team.

    You are starting out at a young age and that is fantastic. That doesn't mean you have to learn from your own mistakes. It is much cheaper to learn from other peoples mistakes.

    Good luck to you.

    0Reply
  • Dave CarpenterPro Member
    Investor · Cedarburg, WI · Member since 2013 · 439 posts · 150 votes
    12y

    @Benjamin Ertl welcome to BP. lots of great ideas already posted. My encouragement would be to save your pennies now, and upon getting a full time job go after a duplex in a good area you are at least somewhat familiar with. Starting with an FHA loan and renting out the other half of the duplex should bring your costs way down and give you a place to live for free or cheap. From there start looking for the next one and get that momentum rolling! Good luck, and certainly shoot out any specific investing questions you have. Lots of very smart people on here.

    0Reply
  • Jeremiah B.
    Investor · Portland, OR · Member since 2012 · 266 posts · 128 votes
    12y
    Originally posted by Benjamin Ertl:
    The idea of taking out a loan scares the sh*t out of me...probably because of all the school loans. I would feel easier spending my own money, but of course that means starting extremely small -- which means it would take longer to start making "real" money.

    Hey man - welcome to BP! And congrats on getting your head on straight at a young age!

    I think your statement here is very informative - and a little concerning. Avoiding debt is fine, and looking for a long-term passive cash flow strategy is fine - but the two are pretty much mutually exclusive. The only exceptions to this are:

    1. Starting with a huge wad of cash.
    2. Going incredibly slowly, and leaving a lot of money on the table.
    3. Partnerships (which I personally find far more intimidating than straight-out debt).

    Your head in the right place and you have your whole career ahead of you. But I would encourage you to think hard about how you feel about debt.

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