$20k Cash Ready to Invest. Now What?

[Alex Mendoza]

Hello BiggerPockets! I’m trying to get started with my first deal. Right now, I have $20k in cash and ready to get started. I’m writing this with a little frustration and slightly demotivated ... but it NO WAY am I stopping!! I’m just ready to get started and want to put that $20k to work.

I've been looking for my first SFH deal (to hold for a rental) in Texas (north of Dallas). I've tried different strategies - driven around, searched MLS (I'm actually working on RE License now), looked at inventory from a few local wholesalers, and mention my interest to invest to a few people I've met. But that 1st deal is still beyond my grasp.

Is $20k just not enough to get started? I’ve analyzed many deals using the Rental Calculator, and they would cash flow, but those deals are snatched up quickly (assuming all-cash buyers). I’m afraid that it will take me a considerable amount of time to come up with enough capital for all-cash deals ... but if that’s what it takes, I’ll keep the course and wait a little bit longer.

[Kevin Dean]

Hey @Alex Mendoza, don't be discouraged, my first deal was with $15K, and I live in the DC area which is a very high cost area. 

After looking for properties in my area for a few months I realized that it was simply not realistic to buy a SFH on my own in the area at that point. So I did three things.

1. I re-evaluated my strategy - There are so many strategies out there that you can make work with different amounts of money. The key is to evaluate where you are right NOW, where you want to be, and then make the best decision based on your current situation and where you are hoping to head long term. 

2. I chose a lower cost market within driving distance (Baltimore, MD) - this was within driving distance, however, now I invest in a market which is not in driving distance, and it still works well. For my first deal, I was more comfortable with a market nearby.

3. I found a partner - this is where I messed up. I wish I would have spent more time really evaluating this partner and searching for someone with values more closely aligned to my own. I did know him for 6 months, talked to a number of his previous partners, but my gut told me that our values were not in line. 

Some people have trouble ever pulling the trigger. If you're like me you may be the opposite, in which case your enthusiasm can get the best of you. Despite the less than ideal partnership, this first deal gave me the confidence to really get after it, and my second deal ended up being much larger. So with all of that said, it's definitely a powerful thing to get into your first deal and get that snowball rolling. Just have to be creative and possibly pursue a less optimal strategy than you may be hoping for in the long term.