Minimum amout for starter investment?!?

[Haiden Welch]

Hi, My name is Haiden, and I'm looking to purchase my first residential investment property within the year.

I am in University and have my Real Estate License and am planning to work part-time as an Agent once I pass my exam to make connections and to keep learning about my San Jose/Santa Clara Market (plus hopefully increase my income).

I am saving all I make at my current job and am trying to understand at what point I can start looking to buy my first Property. 

Do you think I should focus on finding a partnership? What is the Minimum amount of capital I should have before I start looking for a property? Would I have trouble finding a loan? Should I focus on out-of-state investing? Am I better off focusing on doing a flip or wholesaling rather than doing a buy and hold?

I'm relatively new to real estate so any advice or insight means a lot.

Thanks in advance!

[Theresa Harris]

If you want to buy and hold (eg long term rental) and you aren't planning on living in it, you will need 20% down. What that 20% translates to in dollars really depends on where you are buying. You will also need money for closing and an emergency fund.  As for getting a mortgage, you will need reliable income and some W2 to show the bank.

[Derrick E.]

The amount needed is going to vary greatly depending on which state/area you want to invest.

[Haiden Welch]

Quote from @Theresa Harris:

If you want to buy and hold (eg long term rental) and you aren't planning on living in it, you will need 20% down. What that 20% translates to in dollars really depends on where you are buying. You will also need money for closing and an emergency fund.  As for getting a mortgage, you will need reliable income and some W2 to show the bank.

 Thank you!

[Michael Quarles]

Hi Haiden, 

are you an agent or do you still need to pass the test and qualify?  As an investor neither is needed. 

As to how much do you need?   Close to zero.  
Most sellers want to hold a business card. Vista sells them for 80 bucks.  
You need a phone.   I would use Voiply for 20 bucks.  It’s a VOIP.  

You need a car and gas and insurance.   You probably have that already. 

As to wholesale or hold.   The mathematical formula is 5:1. Flip 5 keep 1.  

Investing isn’t as linear as some think it is.  Jump in and learn what you don’t know to know.  

Happy house hunting. 

[Andrew Syrios]

It's hard to put an exact amount on it given property values vary so much and there are a bunch of other factors to consider. I would say you would want at least $10,000 in reserves in case there are vacancies, maintenance issues, etc. Preferably more and definitely more in high priced markets. 

[Account Closed]

Quote from @Haiden Welch:

Hi, My name is Haiden, and I'm looking to purchase my first residential investment property within the year.

I am in University and have my Real Estate License and am planning to work part-time as an Agent once I pass my exam to make connections and to keep learning about my San Jose/Santa Clara Market (plus hopefully increase my income).

I am saving all I make at my current job and am trying to understand at what point I can start looking to buy my first Property. 

Do you think I should focus on finding a partnership? What is the Minimum amount of capital I should have before I start looking for a property? Would I have trouble finding a loan? Should I focus on out-of-state investing? Am I better off focusing on doing a flip or wholesaling rather than doing a buy and hold?

I'm relatively new to real estate so any advice or insight means a lot.

Thanks in advance!

 I would say 25k gets you in the door to many syndications. Just have to do your research! that research process will give you aton of knowledge that in my opinion makes putting a much larger chunk of money to work more palatable 

[Bradley Buxton]

@Haiden Welch

I'd start with a house hack in the area you want to be.  If is MH or SJ or Santa Clara.  Buy a house that might need some work, and get some roommates to offset the cost. This will give you a good idea on what it's like to be a landlord and own property. Meanwhile, get a W2 job so you can get a loan.  Get your license but focus on either investing or agency. A career in real estate takes a fair amount of capital and time to start making money. Start with a W2 and build up some reserves. 

[Nicholas L.]

@Haiden Welch

start with a house hack,  period.  everything else makes no sense whatsoever.

[Haiden Welch]

Quote from @Theresa Harris:

If you want to buy and hold (eg long term rental) and you aren't planning on living in it, you will need 20% down. What that 20% translates to in dollars really depends on where you are buying. You will also need money for closing and an emergency fund.  As for getting a mortgage, you will need reliable income and some W2 to show the bank.

Is an FHA loan on the Table, or would I have trouble qualifying?

[Haiden Welch]

Quote from @Nicholas L.:

@Haiden Welch

start with a house hack,  period.  everything else makes no sense whatsoever.

 I agree this seems like the best option.

[Haiden Welch]

Quote from @Bradley Buxton:

@Haiden Welch

I'd start with a house hack in the area you want to be.  If is MH or SJ or Santa Clara.  Buy a house that might need some work, and get some roommates to offset the cost. This will give you a good idea on what it's like to be a landlord and own property. Meanwhile, get a W2 job so you can get a loan.  Get your license but focus on either investing or agency. A career in real estate takes a fair amount of capital and time to start making money. Start with a W2 and build up some reserves. 

 This helps a ton. Choosing an area to focus on is great advice. Thanks so much.

[Haiden Welch]

Quote from @Account Closed:

Quote from @Haiden Welch:

Hi, My name is Haiden, and I'm looking to purchase my first residential investment property within the year.

I am in University and have my Real Estate License and am planning to work part-time as an Agent once I pass my exam to make connections and to keep learning about my San Jose/Santa Clara Market (plus hopefully increase my income).

I am saving all I make at my current job and am trying to understand at what point I can start looking to buy my first Property. 

Do you think I should focus on finding a partnership? What is the Minimum amount of capital I should have before I start looking for a property? Would I have trouble finding a loan? Should I focus on out-of-state investing? Am I better off focusing on doing a flip or wholesaling rather than doing a buy and hold?

I'm relatively new to real estate so any advice or insight means a lot.

Thanks in advance!

 I would say 25k gets you in the door to many syndications. Just have to do your research! that research process will give you aton of knowledge that in my opinion makes putting a much larger chunk of money to work more palatable 

What is the best way to find a syndication? Is it mainly through networking and events? 

[Haiden Welch]

Quote from @Michael Quarles:

Hi Haiden, 

are you an agent or do you still need to pass the test and qualify?  As an investor neither is needed. 

As to how much do you need?   Close to zero.  
Most sellers want to hold a business card. Vista sells them for 80 bucks.  
You need a phone.   I would use Voiply for 20 bucks.  It’s a VOIP.  

You need a car and gas and insurance.   You probably have that already. 

As to wholesale or hold.   The mathematical formula is 5:1. Flip 5 keep 1.  

Investing isn’t as linear as some think it is.  Jump in and learn what you don’t know to know.  

Happy house hunting. 

This is very helpful. I agree that investing isn't linear and love the 5:1 flip formula.

[Theresa Harris]

Quote from @Haiden Welch:

Quote from @Theresa Harris:

If you want to buy and hold (eg long term rental) and you aren't planning on living in it, you will need 20% down. What that 20% translates to in dollars really depends on where you are buying. You will also need money for closing and an emergency fund.  As for getting a mortgage, you will need reliable income and some W2 to show the bank.

Is an FHA loan on the Table, or would I have trouble qualifying?

For FHA you'd have to live in it. Doesn't mean you can't rent out rooms You'd put a smaller down payment down, but that means you'd have to qualify for a larger loan (ie 95% vs 80%) and have to pay mortgage insurance.

[Markell Hardee]

Quote from @Haiden Welch:

Quote from @Theresa Harris:

If you want to buy and hold (eg long term rental) and you aren't planning on living in it, you will need 20% down. What that 20% translates to in dollars really depends on where you are buying. You will also need money for closing and an emergency fund.  As for getting a mortgage, you will need reliable income and some W2 to show the bank.

Is an FHA loan on the Table, or would I have trouble qualifying?

From the research that I’ve done on FHA, if you live in it as your primary residence (“it” being single family or small multi family units (1-4 units)) you would be able to qualify. If you don’t live in it, you will not be able to use this Loan. I’ve heard of being able to get like 10-15% down payments for secondary residences (meaning you live in it for some of the year) But I think at that point some would argue that it would make sense to just wait, and put down 20% to avoid paying pmi. 

[Becca F.]

@Haiden Welch

I agree with the previous comments about house hacking. San Jose/Santa Clara will be tough market because of the price points. With the loan, if you're looking at SJ and SC you can get an FHA loan but I think the monthly payments will still be very high. I'd recommend considering the East Bay.

Here are my random thoughts: no flipping unless you're experienced. If the house doesn't sell or takes a long time to sell you're paying a lot of holding costs. If you can walk some properties that local flippers have done they can give you more information. Attend local meet ups to talk to other investors, contractors etc. The wholesaling doesn't make sense to me if you're going to be an agent.

No on out-of-state investing unless you actually fly out to that city multiple times, get to know the area in detail and establish a trusted team - this takes several months at minimum. You need a high risk tolerance to do OOS investing - read some of my previous posts. I've decided to stick with value add to my Bay Area rental and increase rents and take a very long pause on OOS. 

With syndications, you usually have to be an accredited investor: minimum $200,000 income ($300,000 for married couple) or $1 million net worth (excluding primary residence). I talked to a few syndications. Their offering memorandums sound good but I don't have enough knowledge to vet who is a good operator so I passed on that. 

Feel free to DM me if you have more questions :) It's great to network with another Bay Area investor. 

[Account Closed]

Quote from @Haiden Welch:

Quote from @Account Closed:

Quote from @Haiden Welch:

Hi, My name is Haiden, and I'm looking to purchase my first residential investment property within the year.

I am in University and have my Real Estate License and am planning to work part-time as an Agent once I pass my exam to make connections and to keep learning about my San Jose/Santa Clara Market (plus hopefully increase my income).

I am saving all I make at my current job and am trying to understand at what point I can start looking to buy my first Property. 

Do you think I should focus on finding a partnership? What is the Minimum amount of capital I should have before I start looking for a property? Would I have trouble finding a loan? Should I focus on out-of-state investing? Am I better off focusing on doing a flip or wholesaling rather than doing a buy and hold?

I'm relatively new to real estate so any advice or insight means a lot.

Thanks in advance!

 I would say 25k gets you in the door to many syndications. Just have to do your research! that research process will give you aton of knowledge that in my opinion makes putting a much larger chunk of money to work more palatable 

What is the best way to find a syndication? Is it mainly through networking and events? 

 Yes through real estate events you can meet them