Newbie with only 10k too start. What too do?

Question

Hello all,

My name is Cody and I'm new too investing in general. Just wanting too get my foot in the door. I have 10k in savings and want too invest it into something profitable. What should I do? I'm 25 with a house and two kids, work in low voltage alarm systems on commercial jobsites.

What would some of you more experienced investors do if you were me? Thanks for any help!

Also I'm in the Northwest Arkasnas/Southwest Missouri  area.

Cody Hall · Answer

@Kim Tucker

Thank you very much that is solid advice. My spouse is worried about me starting, thinking i dont have enough time and we dont have enough money put aside but I've seen others get started with less. I think the part about going too local meet ups and getting connected with people in my market can be a great start too maybe getting someone too help me get started? If my local real estate community is like BP then people here should be pretty accepting.

I just bought David green's BRRRR book and am going too start diving in. I have two uncles who own a real estate company buying and selling apartments down in Texas, and they've main a great living out of it. I know it's a no brainer too ask them for advice as well.  I just want too do this too better put lives and my children's future.

Kim Tucker · Answer

@Cody Hall

What you should do depends totally on your assets you bring to the table:  time, money, credit, debt

And what you need.

And what you want out of investing.

Generally those who turn to investing need to look at the following.

Debt:  if there is a lot of debt,and they don't cash flow with current circumstances to serve that debt, they need to choose strategies that create chunks of cash to pay down that debt.  Wholesaling or rehab flips of houses, or motgage notes.

If there is debt, but you can service it with curent income, then you need to look at cash reserves.

If you have cash in the bank for 6 months or so of living and servicing current debt AND you have the cash reserves to maintain a cash flow in property or note, then you might consider ginger for a cash flow investment,  But until you have these cash reserves, you are just one small disaster from bugger disaster:. An extended illness, an eviction and property damage could put you in a world of hurt.  So pick a strategy to get those cash reserves built up.

Once you have your debt serviced and your needed cash reserves and in a rental property some banks want 30 percent down and 6 months of holding costs sold you go that long without collecting rent.  Yes you can brrrr your way arundel the down payment but not reserves.

Then what can you bring to the table in the way of time, because flipping houses and notes can be very time intensive, unless you hire a team or parner.  So finding another ay to pay down debt and get reserves might be needed:  side hustle, overtime.

But, trying to buy and hold if you can't service current debt and don't have reserves can set yourself up for a very long uphill battle.  Once you can service current debt and have reserves, you will find that as you as cash flow investments, that if you can continue to retire debt by case chnk strategies, that you need way less in cash flow to retire your job.

There's n ebook put there by vena Jones cox  how t get rich in Cincinnati  real estate, that explain this concept very well. You might be able to find it somewhere on line where you can cess it.  There may be some free book here on BP that explain this too.

But I Will never forget all the new investors that call me about the case flow, turn key Kansas City property that they purchased.  They had to beg, borrow and scrape to get it purchased and cash flowing.  The tenant stopped paying, they went without rent for about 6 month as the took way too long to start the eviction process, and when they finally go the house back in need 10k, 20k, or 30k in renovations the be able to rent it again.  No reserves, so it went back to the bank.

Connect with your local investors, learn a bit more about your market, figure out where you are and what the of investment best fits you needs, learn what a deal is, get a solid plan.  The take massive action.

Ken Swearengen · Answer

@Cody Hall I agree with @Theresa Harris. Alternatively you could invest in crowd-sourced real estate investment like Fundrise or RealtyMogul, but those may have investment restrictions due to SEC regulations (ex: I think with Fundrise you can't invest more than 10% of your annual income if you're not an accredited investor).

Dan S. · Answer

I agree with @Kim Tucker and I would add to start listening to the bigger pockets podcasts.  There's a lot of information and good ideas.

Kim Tucker · Answer

@Cody Hall

BP is great, but connecting and learning live and face to face can be very valuable.  I know there is a REIA group in Springfield MO and one in Arkansas somewhere.

Check the BP calendar of events,  check meetup.com and set up some keword alerts here on BP for your investing market.  Go meet people.

Theresa Harris · Answer

@Cody Hall  Talk to your bank and find out how much you can borrow.  If you were to buy a duplex, live in half with your family and rent out the other half, that $10K could go further as a down payment.  Having said that I don't know what the price is for houses in your area.

Kim Tucker · Answer

@Cody Hall

Kvowing what you have, what you need and what you want on paper can help you develop you plan.  What most self he books skip is learning what a god deal is.  They tel you how to do analysis, but Dont stress the practice needed.

So many new investors want that first deal so bad that they ignore or skew the analysis an it cost you nothing to look at deal and practice

Newbie with only 10k too start. What too do?

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