Big saver....why to do next?

[Anthony Reyes]

Hey guys! I just want to get you all’s input on where to go from here. I’m a young guy who is a big saver and I want to get into real estate but know to sure where to go. I’m able to save money every month for a down payment but not sure if that’s the best route to get into the game. I’ve heard of other ideas of getting the money needed for a down payment. Any help here? Also, any good books I should be reading to increase my knowledge of real estate?

[Alan Pederson]

I do lots of research. I look at home prices in my target area and compare that to rent prices for the same size houses. If you do this long enough you will get a sense of what a good deal is.

If I see a 1320 sf house that sells for $145-150k. That same house can rent for $1,400 a month. If I end up with a $800-900 payment, I will make about $500 a month. You would have $30k down + $3-5k in closing. Total cost $35k with an income of $6k a year. That's a little over 17% ROI. I always do the math and if it makes sense think about moving forward on it. You also have to look at schools, crime rates, etc...

I look for anything that will bring in at least 8-10% or better. I usually shoot for 15% or higher.