My Financial Snapshot - What Would You Do?

[Daniel Whitmore]

How does one decide how much capital to invest in their first deal? What percentage of your total assets should go towards a down payment for deal #1? I feel I should plan for the worst and be as conservative as possible.

While I’m hesitant to share a summary of my financial position, this question has been burning inside me and I’m eager for some feedback from seasoned RE investors. Perhaps I’m the only person who can truly answer this one and perhaps I need to do my due diligence crunching the numbers but as I newbie I really don’t trust myself. Any feedback would be greatly appreciated. Here is a quick snapshot:

-37 years old

-Reside in Los Angeles

-Self-employed freelancer (I.e. inconsistent income)

-Currently focused on investing locally in a duplex or SFR w/ ADU.

-I need positive cash flow in the short term

Financial Position as follows:

$25K Cash/Savings

$15K Index funds

$70K Stocks

$40K IRA

$45K Gift from Grandparents for first down payment

$195K Total Assets

If you were in my shoes, and your total income last year was a meager $40K, living in one of the most expensive markets in the country, what percentage of your total assets would you set aside for your first deal?