Starting with 20-30k

[Dave Kennedy]

What do people recommend for someone who is just starting out in REI?

Flips on single families?
Foreclosures?
Wholesaling?
Buying a multi family house and renting it out?

Living in the Mass is extremely expensive, housing has gone well beyond the means for someone looking for a starter home. I refuse to rent and just piss my money away. I'd rather live in a house that I am fixing up, rather then live in a nice lofty apartment.

I have a friend who is willing to invest and go 50/50 on a deal and so far we have just been looking at single familie homes, around 200k, to fix up. The way we look at it we can afford a mortgage around $1,400/month. We each have about 10k to put in plus we can get a little funding from the family for the first house.

For financing we were entertaining the idea of an 80/20 loan. First loan is at market rate, second loan is 1% or so above market rate. Looking to put nothing down, since that money has to go to renovations. I believe the offer fixed rates, but the ARM's are more intriging for a flip, but of course risky.

So that would be my general outline for a plan. But I am wondering if people feel there is a better way to start, if so what?

I'd also like to get some input on finding deals. You can do all the searching online you want but still be behind the 8 ball. Using MLS, locate agencies....etc the good deals already seem to be off the table. Is it just something you have to look at multiple times daily or is there a better way to get an "inside source" before all the info is release to the public.

It may be because I am just starting out, but I seem to only find houses that are on the market for months and months and clearly investors aren't pounding the door down for them, so why should I?

Thanks again!

[Richard Warren]

You seem really motivated to change your situation and that is a great start. Giving up your full-time income to jump into real estate will be very difficult. If the money doesn’t come in fast enough you may find yourself quitting. I understand your position. Twelve years ago I decided that I had had enough of depending on a job. “JOB” is an acronym for “Just Over Broke” or “Journey of the Broke” and I didn’t want that anymore. Knowing that I could not just stop working I began a transition. I started looking for ways to generate additional income streams that didn’t involve trading money for time. Some things worked very well and others didn’t, but I kept going. People were always telling me “that won’t work”, “you can’t do it”, “you’re crazy” but I didn’t listen. Today those people are still doing the same mundane things that they did then and I have a lifestyle that many envy. Real estate is one of the things that worked very well for me and I encourage you to learn as much as you can and go for it. Just remember it is not “get rich quick” and it is work but it is absolutely worth it. I would suggest that you find a way to transition into it and give up your full-time work after you have established yourself to some degree.

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