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Updated about 8 years ago,
How much risk is too much?
Hello, everyone! I understand that the answer to this question will be different because everyone has a different on opinion on how much risk to take. I'm 19 years old I live in Romeoville Illinois, I want would like to start investing.However, I know that if I don't have any money I can partner up borrow hard money and get creative, but for my first deal I want to make it simple I would like to save up to 15,000 dollars for a down payment on a property with a maximum of 5 units. I'm really not sure on the units, however, I want a property with a price of around 110,000 my strategy would be to rent out the property and let the tenants pay the mortgage. Once the mortgage is paid off or I think I have enough equity I would use the equity in the house to buy a bigger deal and so on. My question is I've been educating myself on real estate investing. There is a very famous real estate investor who beliefs, that your first deal should be of around 16 units or more if it less then it's not worth it. Firstly I respect his opinion, but for me, it is to much risk to take for my first deal especially if making mistakes is part of the learning process which I would like to avoid but it happens to everyone. If something went wrong at first I would much rather have problems with let's say two units than 16 units. Plus I would use my fist small deal to gain experience. In my opinion, I'm more comfortable increasing my properties over time. What do you guys think, Sorry if I was not clear enough, Thank You, for reading