Is 50k enogh to start out with?

Question

Looking to make my first REI deal and looking for advice. I have set 50k aside to make it happen. Do you think that is enough to get started?

Timothy Hero · Answer

Your market will determine how far $50k can go.

20% down + closing cost, you're looking at around $200k in rentals. Again, this is assuming you're doing 20% down.

You can buy a dump for $150k, rehab and the ARV be $300k and you refinance your money out and basically got the property for free.

There's so many variables.

Aaron W. · Answer

@Casey Walker santos Before deciding whether 50k is enough to invest, what is your why for investing in real estate?  Also, are you looking for cash flow or appreciation properties?  Do you need the cash flow now?  What type of real estate are you looking to purchase (i.e. single family, multifamily, self storage, etc.)?

As far as financing, it is possible to invest with limited funds. That's great you've saved 50k, that is not a small amount!  Financing is an obstacle that should not hold anyone back from investing in real estate. If you find a great deal, then there are always funds to finance it whether through hard money, private money, investors, or partners.

If you focus your efforts on finding the right deal, you should be able to jump into real estate with what you have saved or maybe even less.

Good luck!

Justin Frank · Answer

@Casey Walker santos

I think this is absolutely enough to get started. We just bought a home in PA for $17k and will put around $35k into rehab. After finished we will be around 40% of ARV. Can flip it or keep it as a rental. You could consider investing $50k passively, or you could partner with someone on a project. Though $50k is not a lot of money when you compare it to most RE projects, it is much more than most will ever have saved so you are off to a good start. You just need to be creative

Brian G. · Answer

@Casey Walker santos sure depending on what strategy you plan to pursue. What objective are you trying to achieve?

Michael Noto · Answer

First off, congrats on saving the $50k. Not many people have the discipline to do that.

$50k should get you into a house hack FHA loan deal if that is what you are looking to do. Whether it will be enough for a conventional buy and hold deal, flip, BRRRR will depend on the specific market like others have mentioned.

Bobby Nilsen · Answer

@Casey Walker santos

Yes it’s more than enough. Just bought a property in the SF Bay Area with less than that. Depends on what you want to do. What are your goals, wholesaling, rehabbing, buy and hold, etc. Depending what your risk appetite is you can make that money work for you.

Chris Youssi · Answer

Too many unknowns with your question. Here are a few questions?

1 - What is avg sale price in the market you are wanting to invest?

2 - Being that your a contractor do you have a relationship with a commercial lender?

3 - Do you have the time to do your own updates/rehabs/ repairs?

Once I have these answers I can offer some more guidance. FYI , as a GC /Custom homebuilder i have bought close to 5M worth of props from 2013-2018, still own 3M /25 doors . I have done all this with $60-65k of my own funds . The rest was BRRRR on steroids - so EZ when you apply the same concepts as a homebuilder to rental portfolio.

Happy investing!

Is 50k enogh to start out with?

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