$22k newbie not wanting to borrow money

[Tia Redford]

I have about $22k and I don't want to use a lender.  Should I try to invest now or wait till I can save more?  Where should I look for deals?

- in Bexar Co. TX

[Jaret Walker]

@Tia Redford

I definitely see the advantages of both sides but If you wait until you can pay for a property in full you will be wasting a lot of time saving your own money when you could be saving someone else’s money (rent). If you will use a lenders money and leverage that you will see a lot better returns than if you wait to pay in full. Just my 2cents!

[Jul Howe]

I agree!  Do not wait.  Leverage with debt and get on with it!  Using all cash is a waste of cash, and then you are paralyzed until youre able to save up alot more cash.  

[Account Closed]

@Tia Redford please include what areas you would like to buy in. That would make a difference in the advice people offer. :)

[Tia Redford]

Thanks y'all.  I'm in San Antonio, TX.

I had another non-real estate investment (a franchise) that failed miserably and put me in a lot of debt.  It has taken my hubby and I 7 years to get out of debt and save the money we have to invest again.  We are so afraid of getting into debt again.  

I've been giving it some thought, and I can get a second mortgage on my house and get a bit more $ if I have to.  Totalling 50k.

Should I start at a tax auction or a really crummy low-cost house from a wholesaler?  We have skills for cosmetic work(installing floors, new cabinets, etc) only.  I don't want to deal with major issues.

[John Gerst]

I am new to BP and REI as well in the San Antonio area. I would also be interested in what areas you are looking in/around San Antonio and would like to connect if you are amenable as another resource in San Antonio. Perhaps we could even work something together. I am conservative by nature, but love repair/rehab and just retired from the military, hence why I am now on BP. Welcome!

[Brandon Miller]

With 22k I would recommend getting in touch with a few Hard Money Lenders, Private Lenders, or forming partnerships with people and leverage each other. You can do this by attending meetups in San Antonio. 

Buying a home all cash does not make much sense to me unless you have a ton of it. For one, you will be married to that house and that house only until you sell it. What happens if something goes wrong and all your cash is tied up? Second, the opportunity cost of waiting around until you have 200k is tremendous. You won't be able to do a single deal for years if you are on a fixed income.

Debt is not a bad thing when using it to make money. If you'd like, I can put you in touch with a few Hard Money Lenders I deal with daily. 

Have you thought about doing a few wholesale deals to gain quick capital, then move into flipping / rentals?

[Theresa Harris]

@Tia Redford  I would wait.  Look at the type of house you are going to get for $22K in your area and then think about the type of tenant it would attract.  A lot of times the cheaper homes have higher return, but higher risk.  Based on what you said, I'm going to guess you are a bit more risk adverse (which is fine).  Look for a solid starter type home.

[Jaron Walling]

Anything that's worth your time and money in San Antonio, TX is going to be expensive. I think most people can agree with that statement. 

$22K sounds like the perfect amount for a rehab on a small SFH, or a fat down payment. If you locate a DEAL someone has money to help you purchase it. When you know the neighborhood, ARV's, estimated costs for rehab, expected rent, it becomes a no brainer. If you wait to save more cash you're wasting time. We don't have loans for TIME.