can i really start with 25k .help please!

Question

Hello everyone..

i really want to leap out on faith and actually take action and buy a rental but can i really buy a rental with 25-30k..or should i maybe invest more in materials ( DVDs) on exactly how to do deals or exactly where to start.

I  know this is not possible in New york but has anyone successfully bought rental in states other than where they live?

I saw an Hud reo about 2 blocks from me that was listed at $159,000 last sold for 433,000 (3bd 1 b) left a message for the agent but he never called back...took a walk there today , couple windows broken but seems okay...

should i continue to save ( can't even get $30 in interest from saving account) can someone please give me some suggestions.

many thanks

Carlton Ellis · Answer

There is a difference between spending money and investing money. So I'm tend to take the adage "You have to spend money to make money." with a grain of salt. When you invest money you weigh the risk against the expected return. If you go to an real state investment seminar that turns out to give faulty advice or for any other reason you can't capitalize on what is taught then there is no return on investment.

Personally I've found that there are other alternatives to gaining real estate knowledge besides high price seminars and courses. Bigger Pockets is great place to start but there are also books and you can gain knowledge by just searching the web on a given subject matter.

Lee G. · Answer

It depends on what you are willing to do.

My first property was a 4 plex that I bought with an FHA loan. I lived in one of the units and rented the others out. I had just enough into it so I could live for free and have a couple bucks of cash flow on top. If you are willing to do something like this, there are tons of properties you can get with that $25k.

Peter Giardini · Answer

Anthea... if you are talking NY... NY then $25K is not going to get your much.  If you are talking Rochester you could probably pay cash for a managable rental.

I would recommend that you not spend money on any courses until you know what you want to be doing.

Hang out here on BP, ask questions, formulate a plan... read most of my blog posts.... (they deal with many of the issues you are going through just getting started)... and then once you are satisfied that you know what you want to be doing and why... jump in!

Best of luck!

Dennis Aennis · Answer

Hi Anthea,
          
          Nice name!
          
          $25k is definitely enough to get started, but I wouldn't put it all or even most of it in one deal.
          
          $25k allows you to have some awesome reserves as well as leverage, but I would recommend starting out by wholesaling at first.
          
          You  get a lot of learning and earning done in this process while limiting risk to just a few dollars (my students risk only $50) max on any one deal.
          
          Here you get to work the kinks out and learn what makes  a deal, negotiation, contracts etc and if it turns out to be a dud- you'll only be out a few dollars instead of $25k or risking your credit.
          
          Not bad.
          
          Please start here. You won't regret it

When you are ready to start keeping houses, using creative strategies and thinking your $25k can be used on several deals not just on one.
          
          Dennis

Anthea S. · Answer

Many Thanks to Peter,Curt,djjkl, Lee and Marcus. I am honestly very greatful for your suggestions...

I had a friend insisting that i take the money and do one of the wholesaling 3 day workshop because he said one have to spend money to make money and since i don't know where/ how to begin investing rei he thought i should get sone hands on training on exactly how to begin....

I wanted a rental first because it seems simple if i buy one that already have tenants with leases . Also rental is my long term objective.

thanks again

Marcus LaGrone · Answer

Anthea,
The big questions is why do you want to buy a rental property?

Are you just looking to supplement your income with one property? Or, are you looking to become an investor and purchase several properties?

If it is the latter, the best thing to do is to NOT purchase a rental right now.  25k is a good starting point for investing in several markets (not necessarily NY), but you donâ€™t want to invest the whole amount into one rental property because then you have no money to continue investing with.

You would be receiving a small amount of additional cash flow each month, but you would be unable to purchase additional properties.

The best route is to take the 25k and go to a market where you can find a property (within your price range) that needs rehab.

Find a lender that will lend on a rehab or (if your credit is not the best) a hard money lender.  Purchase the house, fix it up, and sell it for a profit.  Do this a few times before you start buying rental properties and you will always have money to buy more.

Antheaâ€¦I just gave you the simplified version.  Please donâ€™t be over anxious to purchase a house because you have a few dollars and please do not read this post and think itâ€™s super easy to do.
Investing can be done, several people invest everyday and make a lot of money (just read the stories on this website), but several people also loose their shirt trying to invest before they have a full understanding of what theyâ€™re doing.

For now, educate yourself, network, and enjoy the ride.

If you have any questions, send me a colleague request and we can talk.

Josh Keys · Answer

As Peter said NYC or around wont get you much, but upstate NY has plenty of options for you.  
                    
                    Look at Jamestown NY or Rochester as suggested.   You can easily pick up rentals in a positive cash flow position in upstate NY for under $50k.  Have a look at Craigslist (Chautauqua or Monroe sites) for well priced properties.

Dont be afraid to invest out of your local area.  Just do your research thoroughly thats all.  Im buying in NY, and im from the other side of the world.  There are a number of other out of state investors on here.  Some people advise against it but you just have to get a good property manager imo. 
                    
                    Recommend avoiding courses.  Advise get a few good books (i liked 'Real Estate Investing for Dummies' and have heard good things about 'The Millionaire Real Estate Investor'). Browse the posts on BP.  This is one of the best resources out there for an newbie investor!  The posts, blogs and articles are very informative and written by people that really know their stuff.
                    
               Good luck.

Curt Davis · Answer

Here in Memphis TN we help investors like yourself buy homes in your price range all the time.  SmartMoney.com rated Memphis #2 for markets to invest in for 2010. With a 25-30k investment you can get on average $500 gross monthly cash flow, up to 20% + ROI !! Let me know if I can be of any assistance.

p.s. do not spend your money all your money on coaching, seminars, mentors.

can i really start with 25k .help please!

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