What to do with $30K?

[Marc Dufour]

I am new to real estate investment. What real estate product and market would you suggest to invest $30K I can take from a HELOC?

[Mike D'Arrigo]

Hi @Marc Dufour 

There's properties out there that with $30K you can buy for cash but I wouldn't recommend anything in that price range for a new investor, especially one that would be buying out of state. They look good on paper, but you're not going to get quality tenants. You can count on high vacancies and turn over costs. Personally, I would use $30K from the HELOC as down payment for 2 properties in the $60K range and finance the rest. You can use the HELOC as a down payment and since it's not on the properties you're financing, it's not considered in your loan to value. This spreads your risk out over a couple of higher quality properties and give you more cash flow. I'd be happy to talk further if you'd like.

Mike