Ways to get started other than house hacking?

Question

Hello. I’m wondering what advice people have on ways to get started in real estate investing when house hacking is not an option? My husband and I had high priority on buying our dream primary residence and now that we have that, we’re looking at other ways to invest our money with the goal of making retirement more realistic. Currently we have about 60k saved up. We’re starting our research and diving into all the bigger pocket resources, but I’m wondering if people have suggestions for what to focus on as we explore options other than house hacking, or if that’s even feasible. Thanks!

Account Closed · Answer

Sure, people like me use private money from people like you as a Joint Venture and teach people like you investment strategies while you get a nice interest on your money. The lender also gets experience and doors open up. And as they build their investment portfolio, the lender gets introduced to people and opportunities they would not have known about otherwise.

Lawrence Potts · Answer

There are a lot of options outside of house hacking. House hacking is great because of the low down payment options. Most traditional lending requires at least 25% down. @Grant Schroeder and his team with academy have a 10% down product that I’ve helped use with some investors.

There is also the syndication route. It’s more hands off depending on the group and the deal. But it tends to have less risk and less reward. Private lending is the same, less hands in the pot but risk is placed in the person you are investing into.

Hope that helps!

Brock Mogensen · Answer

It really depends on what your investing goal is. Are you looking to be passive or active in your investments?

If active - you can use the 60k to buy a 2-4 unit. With 75% leverage, you can get something in a decent area for $240k.

If passive - you can look investing in a syndication as an LP.

Michelle Crochet · Answer

Congratulations on purchasing your dream primary residence! There are certainly other ways to invest in real estate besides house hacking. Here are a few ideas to consider:

-Rental property: You can purchase a rental property and collect rent from tenants. This can be a long-term investment that generates monthly cash flow and builds equity over time. Look for properties in areas with strong rental demand and consider working with a property management company to handle the day-to-day operations.

-Flipping: If you have a knack for renovations and are comfortable with taking on some risk, flipping properties can be a way to generate profits in a shorter time frame. Look for distressed properties in up-and-coming neighborhoods that you can renovate and sell for a profit.

-Real estate investment trusts (REITs): REITs are companies that own and operate income-producing real estate. You can invest in REITs through the stock market and receive dividends based on the company's performance. This can be a more passive way to invest in real estate.

-Private lending: You can also consider lending money to other real estate investors who need funding for their projects. This can generate a steady stream of income with minimal involvement on your part.

As you explore these options, be sure to do your due diligence and seek advice from professionals like real estate agents, attorneys, and financial advisors. Good luck, Leah!! Hope this helps :)

Vicki X. · Answer

Since you are just starting out and don't have a primary home yet, I think house hacking would be the best approach. You can also explore OOS investments in lower cost but higher growth potential areas relative to your home base. Here are some general ideas about OOS.  Hope it helps!

• Your budget: are you looking to buy under $200K, $200-300K, $300-500K or higher? It can help you create a short list
• Population growth, employment growth, wage growth, composition of business types are the most important factors in the health of the market. There are many analysis, charts out there. Specifically. places where the millennials are attracted to are interesting as they are becoming the biggest renter and homebuyer group
(Note: Be careful with 'historical' data. The top growing markets in the last 2 years are unlikely the most sound choices. Good examples are Austin and Phoenix. Try to add the futuristic lenses into your analysis whenever you can. In the ideal case, there be a "new California" emerging somewhere in the next 10 years. But to be frank, CA's trajectory is impossible to replicate as working remote has become more prevalent, companies more “decentralized”, and more people think about not just professions, but also lifestyles these days).
• Are you able to find trustworthy realtors/PMs or even service providers? Do not get into a market before you know whom to work with. Many investors interview many to find the best one.  In my case, I started in the Houston area as my friend had very good recommendations for me. So use your network to get more ideas!
• Run the numbers to understand the cash flow, and pay attention to the major cost such as the effective property tax rates. It typically range from 0.5%-2%+
• Rental regulations as some States are more friendly to renters while some more friendly to investors
• Distance to you. If you find a good area 2-5 hours drive from you, it’ll be easier to meet your team and check out the properties in person
• Certain hazards or costs that you want to avoid.  Drought, flooding, snowstorms, tornados, just to name a few

Your budget: are you looking to buy under $200K, $200-300K, $300-500K or higher? It can help you create a short list

Population growth, employment growth, wage growth, composition of business types are the most important factors in the health of the market. There are many analysis, charts out there. Specifically. places where the millennials are attracted to are interesting as they are becoming the biggest renter and homebuyer group

(Note: Be careful with 'historical' data. The top growing markets in the last 2 years are unlikely the most sound choices. Good examples are Austin and Phoenix. Try to add the futuristic lenses into your analysis whenever you can. In the ideal case, there be a "new California" emerging somewhere in the next 10 years. But to be frank, CA's trajectory is impossible to replicate as working remote has become more prevalent, companies more “decentralized”, and more people think about not just professions, but also lifestyles these days).

Are you able to find trustworthy realtors/PMs or even service providers? Do not get into a market before you know whom to work with. Many investors interview many to find the best one.  In my case, I started in the Houston area as my friend had very good recommendations for me. So use your network to get more ideas!

Run the numbers to understand the cash flow, and pay attention to the major cost such as the effective property tax rates. It typically range from 0.5%-2%+

Rental regulations as some States are more friendly to renters while some more friendly to investors

Distance to you. If you find a good area 2-5 hours drive from you, it’ll be easier to meet your team and check out the properties in person

Certain hazards or costs that you want to avoid.  Drought, flooding, snowstorms, tornados, just to name a few

Jaron Walling · Answer

@Leah Mohtes-Chan From a novice prospective (appears that way) there's two proven strategies. House-hacking, live-in flips, or a combination of both. In my opinion these strategies net the most bang for your buck. Flipping doesn't make sense for most new investors. Multi-family (5 or more units) doesn't make sense on top being competitive and dried up in most markets.

Market research and defining your goals is everything. REI comes down to the numbers, location, and what you want from from a property. There's no perfect property and I don't believe in the forever home. Stick to the basics and you'll be alright.

I'd guess next to nothing in Spokane, Washington cash-flows...? Look for value add opportunities, put as little money down, and use the remaining $$$ for a rehab. Work with local contractors, demo a kitchen, roll paint, find deals on materials, and save money. It's time consuming but it's a sacrifice to jump start the journey. Sell the property in two years for a tax free profit or rent it out. Maybe you can break even or cash-flow a bit if market rents increase.

Eliott Elias · Answer

Every other strategy is at your disposal. If you were to tell us what your goals are in real estate, I could better answer this question.

Stacy Raskin · Answer

You could explore buying long term rentals in more affordable areas so your saved money goes further in the form of lower down payments compared to higher cost areas.

Leah Mohtes-Chan · Answer

Thank you I have not researched syndication. I will look into that

Leah Mohtes-Chan · Answer

Hi Eliott. I am considering a buy and hold strategy with rental properties. Living in WA though and not house hacking, it seems like it would take a bit of time to save up for each property. So I might have to explore out of state options. My main goal is to be able to support retirement and not have to rely solely on my retirement accounts and social security. So I’m trying to think long term.

Ways to get started other than house hacking?

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