Need advice - buying my 1st investment property

[Bruce Zhou]

Hey guys,

I am new to real estate investment and have some questions.

I have about 200K in the bank and I am hoping to use them to do some investment.

1. My plan is to start looking for houses in cities that only cost 100K so that I only need to pay 20K deposit. And then I can make profit using cash flow.

For example, I paid 20K and now looking for tenants to pay $1300 per month. Let’s say the mortgage and other costs are like $800, maintenance fee / tax/ property management fee is 300, so my cash flow is $(1300-800-300) =$200 per month. But since I already invested 20K, in order to get back my 20K, it’s gonna take 20K/200= 100 months, which means it’s gonna take more than 10 years to get back my deposit.

Of course I can keep buying houses to use up my 200K splitting it into the deposit of my 10 houses, but then what’s the point? I can easily get the money into stock market and get 15% profit every year.. or am I calculating it wrong? I am so confused..

2. Should I buy house instead of condo or townhouse to avoid hoa?

3. should I use these 200K to do other investment such as investing into a scuba diving shop, would it get me better profit than real estate?

I appreciate any feedback. I am also happy to connect with you all. If you don’t mind chatting with me via zoom and give me some advice that would be awesome. If you live in Seattle I would be happy to buy you coffee for in person chat.

Thanks a lot

Bruce

[Sherief Elbassuoni]

@Bruce Zhou,

1- I doubt you will be attracting good quality tenants for very cheap properties. Distressed properties attract bad tenants

2- I like single-family, and small multi-family. A lot of condos/townhouses have HOA which can restrict a lot of stuff while you are doing the rehab

3- With Real Estate you get many benefits like appreciation, cash flow, tax benefits,.... Not all of these benefits are there in other investments.