How much money do I need to start?

[Manuel A.]

Hey there,

My name is Manuel, I made an ambitious post last year trying to push myself to leap into REI starting out as a wholesaler. To be honest, I gave up because of all the negativity. IE: Don't do it, it probably wont work, it's hard, you'll rarely get a deal, it took me five years to get my first deal, get a job instead, do something else, etc...

So in the mean time, I kept reading about REI, but never leaping. I just have a ton of theory. I've also continued with my schooling and am about to receive to Associates degrees this year (Liberal Arts and General Studies), which aren't much to me but a resume builder/job marketing ploy... but hey, anything to help my perceived intelligence and get me a higher wage/salary is great :D. My main degree of which will be in either Diagnostic Medical Sonography, Nursing, or Respiratory Therapy will be on my resume as well within about two more years.

Okay, now to my main question. How much money do I need to get into REI as either a rehabber, landlord, or whatever else you can think of. I'm open to suggestion.

Here's my information:

First, my biggest barrier; my age. I'm 20.

My personal expenses will be covered by my job of course (of which I'll get when I start investing or need more money). I grew up in poverty (mom, no dad, 2 sisters, mom made ~$16,000 gross yearly income.) so I can live on very small sums of money (and be happy :D). In fact, I can probably save ~$400 a month on $7.50/hr part-time.

I have zero debt. Just recurring debt IE; cell phone, helping mom with monthly bills, etc...

I have a car which is paid, and wouldn't want to loan against but maybe if I felt exceedingly confident. It's worth (new) ~$24,000. Used probably (conservatively) ~$18,000. Yes, I don't make a lot of money but I did manage to pay it off. My mom taught me how to be frugal and spend my money wisely. Although, buying an expensive car (in my eyes expensive) probably wasn't too smart at my income level. But I did it successfully :D! So yeah!

Currently I have no income, just saved up funds. Approximately $14,000+. And just so you guys know this is A LOT of money to me. Losing it would devastate me as I'm poor, have been poor my whole life, and getting this much money again would take a long while. I mean you (and the government) might not think I'm poor, but it's all I have. No money coming in at all. Just my account getting smaller and smaller. And it's not like I can go and get a job that pays me even 20K a year when my funds run low, nope. I'm stuck in minimum wage land as I'm schooling full time and it takes up almost all my time. I eat, EVERY SINGLE DAY, Spanish rice, and cupped soup as my meals which is fine. I love Spanish rice and cupped soup :D. I'm not working as I like focusing on my studies. I have a 3.9 GPA so far...

As for resources, I have an uncle who is a "jack of all trades". He is amazingly handy when it comes to fixing up houses. I also have other relatives that would lend a hand. I have a credit score in the 800's and the other one's are just as excellent. I have an aunt licensed in real estate. And I like to believe I'm smart and have the ability to make good, slow, well thought decisions. Especially when it comes to money.

So considering I only need a small amount of money to live, have free labor at my disposal, and have no debt along with a great credit score. How much money should I save before jumping into my first deal. And it can be anything, rehabbing, landlording, I don't really know much else, but hey, anything you can think of to start me off in this, I'm willing to listen. Mind you, my girlfriend (of seven years) would be getting the qualifying loans in theory as she's had a steady job and coincidentally her story is much like mines (poverty, great credit score, no debt, etc...) and she has about $3,000. Plus we have a beautiful daughter (10 months old) and for that reason, we get about $5,000 at tax time. The State pretty much covers all my daughters expenses, it sounds weird, but with food stamps, wic, and tax benefits I'm am or am almost profiting off of having a daughter, haha. Of course that's not how I think of her :D. Soooo.... tell me what you think :D!

Sorry for any typos, I'm tired,

Manuel

[Will Barnard]

Manuel,
If rehab flipping is really what you want to do, then make that decision and let me know. I am not in NM, but in CA, however, if you really have the drive that I am reading in your post, I would be happy to mentor you via email. (Free) Start attending RE clubs and stay away from the guru sales pitches and programs. There is no fast track, only hard work gets you to the pot of gold.

I am a full-time rehab flipper and very experienced in that strategy.

DO NOT wait until you have $20k. You have $14k now and some value in a car, the longer you wait, the longer it takes you to get to your goal. You can actually start out with no money if you have friends/family with cash willing to lend to you. In your case, you have a decent amount of skin you can place into the game which should satisfy most lenders.

Make sure you get fully educated on the process of rehab flips and how to get your acquisitions. BP nation is a great place to learn and meet contacts who can help you.

Congrats on your drive to succeed, there are many like you who started with literally nothing and now are multi-millionaires, make sure you realize this is possible for you too!

Also, get very, very familiar with your local RE market and the current and past conditions by driving neighborhoods, talking with agents, looking at inventory levels (current and past), and know which areas to stay clear of, which homes sell the fastest and in what areas.