Starting Out Today with Low Income

[Steven Sullivan]

Hi everyone, nice to meet you!

I’m an eager new investor working on getting my first single family househack. I plan to get a 3 bed with a garage which I will live in, and rent out the bedrooms. That being said, I was wondering if anyone knows someone who was able to invest with only a $40,000 salary? (I’m a teacher). Getting a co-signer is very possible. But I am single so there is no second household income.

I would like to be able to afford my whole mortgage at 100% vacancy in a disaster scenario, which puts me at buying houses less than 200k at the current interest rates including expenses and insurance. I also live very frugally. 

With these interest rates, good positive cash flow with less than a 200k property only seems doable outside the city (an hour outside of Austin) or in good cashflow markets like the Midwest or parts of the Southeast USA. Can anyone offer advice on whether it’s worth making the move to a large city in the Midwest or a smaller town in the state you live in? Specifically, do mid-sized to small towns outside of big cities have sufficient rental demand for rent by the room? And would you recommend it? What would you do if you were in my position? A lower income, but willingness to sacrifice comfort in order to set yourself up for an abundant future.

Any advice or insight is appreciated! I really am open to anything. I fully live behind the, “How can I?” not “I can’t.” mindset. Thank you for your time!

[Min Zhang]

Hey Steven! Welcome to BiggerPockets! You’re in the right place to learn about remote investing.

I like starting in the Midwest because it's affordable and offers good cash flow. Following David Green's Core 4 strategy (realtor, contractor, property manager, and lender) gives confidence to invest anywhere. I would say, the Ohio market in general is a very beginner friendly state to get started with your real estate journey. I have seen so much growth in Columbus when it comes to appreciation and job opportunities which I have experienced. On average, 80 people move into Columbus weekly.  It has seen significant growth, especially with tech giants like Intel, Meta, Amazon, and Google setting up operations, driving up property prices and job opportunities. On the other hand, if you have a lower budget, let’s say $100-$150k. Cleveland would be a great market for you. I have experienced cash flow anywhere from 10-18% with so much more to offer. As a real estate agent and an investor, I am on the market daily and explore opportunities for myself and my clients. Let me know if you need assistance!