$40000 saved to invest in rentals/right time or save more/wait

[Bradley Penrod]

I have $40000 saved and want to get into the real estate investing game. However, my intuition is telling me that I should wait till I have $100000 saved then go for it which I can probably have by late fall of 2020. My other intuition: we are at the top of the market which means I would be the sucker with $40000 grand saved up, bought my property at the top and could've saved $100000 on a similar property if I had waited, could have saved another $60000 in my bank for emergencies. AND, the numbers to do not add up on any of the properties around my area. 

[Neil Henderson]

I'd venture a pretty sizable bet that you could find people on this forum who were talking about the "top of the market" back in 2016. Here we are, nearly four years later, and I'd also bet a number of those people are still waiting for the market to drop.

Your caution is understandable and healthy. No one has a crystal ball that is going to tell them exactly when the market is going to drop (or where). If you are sitting on the sidelines waiting for the perfect time to invest, you'll likely be waiting for a looong time. And then if there IS a big market correction, people often find themselves lacking the necessary experience to give them the courage to invest in a down market.

The Three Immutable Laws of Real Estate Investing (courtesy of @Joe Fairless)

1. 1. Invest for cash flow, not appreciation. Cash flow is what is going to keep the lights on. It's what will allow YOU to choose when to sell and hold the asset while natural appreciation does its work.
2. 2. Invest with long term, low-leverage debt. Buy with debt that amortizes over 25-30 years, doesn't have a short term that comes due in 5 years and don't over leverage. 
3. 3. Go in with sufficient cash reserves. If there is a market correction, or you have something that goes wrong with your property, cash reserves are going to allow you to hold on while you (or the market) adjust.

If you invest with those 3 things in place AND buy a property at a discount (BRRRR), you will survive most market conditions and time (the investor's best friend) will do its work.