Best low money & Best high money investments?

Question

Susan Maneck · Answer

Trey, if I were you I would concentrate on investments there in Jackson right now. Texas is way overpriced, IMO. While the foreclosure rate is very low in the rest of the country it is still 10% in Mississippi which keeps property values ridiculously low for investors and rents here are high! You might consider transferring to JSU so you can manage any properties you might buy. (Of course as a JSU prof., I'm prejudiced.) There are plenty of JSU prof. who invest in real estate that would be happy to give an eager young man advice. If your father has money you might go together on a property. I would recommend starting out with a 30K property that doesn't need much repairs either in Jackson south of Mcdowell or on the north side. Properties on the north side will cost more especially where the high school is Murrah (best high school in town) but you can charge a lot more in rent. A house that rents for $800 on the south side will go for $1100 where  students go to Murrah.  Look carefully for any sign of foundation problems (cracks in bricks, walls, etc. doors that don't close right.) We have yazoo clay here which is really bad for foundations. I have picked up 3 bdrm 2 ba houses with two-car garages in the 30-35K  price range. I just rented one Section 8 for $868 a month. Another alternative would be to buy a duplex and live in one unit, renting out the other. Those shouldn't cost much more and they are a great way to get started. But again, check out the foundation. The three things you want no problems with are roofs, mold and foundations.

Tamara Elliott-Deering · Answer

I would move to Mississippi in a heartbeat if I could but my husband told me that he won't even drive through the state, he'd drop me on the western border and pick me up on eastern. He's a yankee through and through, what's a girl to do. Anyway, I concur with @Susan Maneck, there is a lot more room to make some money in the buy and hold world in Mississippi than in Texas, at least from a central Texas perspective. One other option you can consider is house hacking your first investment. Have your Dad help you get a fixer somewhere near where you go to school in Denton. Fix it while you live there and rent out rooms. As for your Dad and his high yield requirements he may look into becoming a private lender or an equity partner. His returns will be higher and more consistent than with buy and hold at least in the short term.

I started by getting my RE license, not what I would recommend necessarily but that's what I did.

The bank of Mom and Dad funded my first flip and still cover my shortfalls, so far it's worked out way better for me than them, a situation I hope to rectify shortly.

I focus on flips because that's what I love to do but if I were just starting out I'd focus on wholesaling, your on the right track with flyers and possible door knocking. I'd look into bandit signs (if they are legal) and driving for dollars. Do what ever you can do to start getting deals to come to you. I would probably also set up an inexpensive website and play with lead generation that way. You've got time to experiment so get started and keep at it and you'll do great. As for your final question, I think I answered it first. House hack, get roommates to cover your bill and stop paying UT for housing.

Best of luck to you. Keep us posted.

Robert Lum · Answer

@Trey Brooks

Congrats on finding your passion and welcome to the club! I was in a similar position to where you are now. Since you are off to college, my advice is for you to take courses on finance and marketing. Wholesaling is all about being able to market yourself. Finance comes into play when you're crunching numbers and trying to determine whether this is a good deal or not.

Action is always the most practical application. Go out there, knock on those doors! But remember, you are there to sell yourself and telling them why they need YOU, not you begging to wholesale their property. Let us know how your door knocking venture goes!

Susan Maneck · Answer

Tamara, I'm a California girl which is as far from Jackson, MS as you can get. But that is part of why I find the prices of real estate here so amazing. Trey, my mother has helped me on some of my investments and I am 60 years old, so don't be afraid to ask. If it looks like a good investment they'll go for it and in your case this is precisely what your father wants you to do.  One of the reasons I got into this in the first place is my foster sister lost both her job and her home to the recession and was forced into bankruptcy. She was living in Lake Tahoe at the time and had to move to a small apartment in Carson City, Nevada. Well, Nevada was one of the hardest hit areas during the recession. So I started to look at properties there. I found a manufactured home (over 1400 square feet) with a two car garage there for 65K. My mother was worried sick about my sister and her husband, so I persuaded her to establish a self-directed IRA. She then took part of that money and used to to fund a mortgage for my sister (warning: were there any blood relation or official adoption this would be a prohibited transaction.) The other part was used to buy a house in Jackson which I manage for her. She paid 15K for the second house and it rents for over $740 a month.

And btw, I'm now preparing for my eventual return to California. I just had an offer accepted on a condo in South Lake Tahoe. It's 110K and I can cover my expenses by renting it out until I'm ready for the big move.

Trey Brooks · Answer

You guys are awesome!!

Professor @Susan Maneck Thank you so much for being a wealth of knowledge any way we can exchange emails or #'s incase I have more questions, or if you need someone to run errands for you?

@Tamara Elliott-Deering ; that is hilarious😂 Why won't he move? Did getting your license help you at all? Your advice is pretty solid, house hacking may be the way to go, I believe. PERFECT advice to give to my dad aswell, thank you.

@Robert Lum; Your advice is amazing as well. Will definitely keep you updated. Would love to hear how you started & any adversities / triumphs you've encountered.

Thank y'all, again.

Best low money & Best high money investments?

Most Popular Reply