Let's say you have $80K in your savings account...
Investor · Reading, PA · Member since 2014 · 167 posts · 49 votes
Let's say you have $80K in your savings account...
Most Popular Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votesDon't househack, especially with a family. That's a great way to sacrifice your family.
House hacking works if you're ready to do it every 3-7 years and put 10-15% down, not 3-5% and doing it every 1-2 years. You'll run into DTI problems. Also, a SFH> 2-4 unit in almost in any area, especially HCOL. You can househack non-conventionally, but that's by renting the room out and the better way. Still with a family, that's a no-go.
$80k cannot get you at $400k house, you need closing costs + reserves. It gets you a $260-$280k house with "BP reserves" and normal closing costs.
You need to tell us what this $80k is and what your intentions are. Is it your actual savings or was this saved to invest, because there's no such thing as "excess" cash.
But ideally you don't tell us, you are just going to have agents pitch their city like @Julian De la Guardia & the sort. Rather I hope you had an intention with this, and therefore can answer it yourself.
82 Replies
- 1yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Most real estate is not a short term gain, it is long term by letting your tenant pay off your mortgage. The short term real estate is flipping which is high risk. If I wanted to get into real estate and had $80K, I'd find a place under $400K (because you need 20% down payment) ideally a duplex or a home with a legal suite in a good area. No HOA, no condo.
Edited to add: I'm not sure I want to buy any more rentals, so I'd stick it in the bank and probably make more off interest than I would a rental...and with a lot less work and risk.
- Member since 2024 · 10 posts · 15 votes1y
Hey @Jennifer Fernézen, you know what’s funny? I remember back when I first dipped my toes into real estate investing...around the time I’d hoarded my first serious nest egg like a squirrel stashing acorsn...I had something close to your $80K set aside. I can’t lie, I felt a little jittery stepping in, kind of like I was about to bet on a horse race without knowing which jockey had the best track record. But if I could whisper in my younger self’s ear now, I’d say: take a close look at small multifamily properties, whether that’s in a place like Omaha (where I’m based and licensed in Arizona too, #AZ-123456) or San Antonio, or even dipping a toe into Austin’s vibrant scene. There’s just something about owning a duplex or triplex that makes the numbers more forgiving...you’ve got multiple units covering your expenses, and if one tenant’s late on rent, at least the others might keep the ship afloat.
A friend of mine once worked with a client who snagged a triplex down in Austin and ended up treating me to breakfast tacos after those first rent checks cleared. Another old buddy in San Antonio picked up a modest fourplex a few years back, and while it never turned into a headline-worthy success, those steady rent checks stacked up over time as local employers brought in fresh workers. Reading markets like Allentown, Pennsylvania, from what I’ve heard, have been quietly catching investors’ attention lately. If I were you, I’d consider chatting with a property management firm active in that area...SlateHouse Group’s name comes up in local investor circles now and then...just to get a sense of what rents are really doing on the ground. I’ll admit I’m partial to getting out there and feeling the vibe myself, but if you’re short on time, a good local contact can be gold.
And don’t underestimate markets like Phoenix or Chicago either. I’ve personally helped folks navigate 1031 exchanges in Phoenix, rolling their gains from one property into something bigger and more strategically placed. I’m no attorney or CPA, so I won’t wade into legal or tax advice, but I’ve watched a well-timed 1031 turn a humble starter property into a stepping stone toward a whole portfolio. Sometimes, just knowing the rigth people...whether that’s sharp-minded agents who see a gem before it’s polished or a reliable contractor who’s not going to vanish mid-renovation...can make all the difference.
If I had to do it all over again with $80K in my pocket, I’d jump on that first multifamily, rent it out, and let the tenants’ checks pay off the mortgage month after month. You might hit a few bumps in the road...tenants who imagine due dates are more like suggestions, or unexpected repairs that crop up at the worst possible moment...but that’s part of the ride. You’re building something that can appreciate over time, something that might look a whole lot better than a stagnant savings account when you’re eyeing your next move. Eventually, you’ll look back and appreciate that you took the leap, even if it felt a bit off-kilter at first, kind of like trying to balance on a beam after a strong cup of coffee. But trust me, once you get the hang of it, it’s tough not to start eyeing the next deal.
Julian & Jasper
- Your trusted, investor-focused agent in Omaha, NE. The #1 Place to Move to! (Forbes, 2024). - 1yJake BakerBusiness MemberFlipper/Rehabber · San Diego, CA · Member since 2020 · 1k+ posts · 695 votes
House Hacking a primary residence is the best way to generate wealth for the typical American. Do this every two years within your means and willingness to sacrifice comfort.
No matter what strategy you pick, sacrifice is required. Whether you are sacrificing your comfort to house hack, money for a down payment to cash-flow more, or one of the wealth generators based on the market itself, there is no one-size-fits-all perfect investment.
BookkeepingRE - Bookkeeping for Real Estate & Service-Based Businesses58 Reviews - 1yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
As noted above, your housing is the very first place to start. You will get the greatest returns and have more control. Find someone your comfortable discussing your personal situation, possibly at a Real Estate meetup in your town. There are many angles to make far more money thru your housing, versus investing somewhere else.
- 1yMatthew MorrowBusiness MemberInvestor · PA - NY - NJ · Member since 2019 · 458 posts · 168 votes
Quote from @Jennifer Fernéz:
Let's say you are a brand new investor. You are 40 years old and you have a family. You have $80K in your savings account, and you decide you want to invest in real estate.
Knowing what you know now, what would you do with your 80K? How would you make it grow the quickest?
Greetings from Allentown!
House hacking a 2-4 unit might not sound glamorous, but it’s hands down one of the fastest ways to build a paid-off rental portfolio — even with a family. It’s especially effective in eastern PA, where competition and inventory can be tough.
If you've got $80K, I'd suggest capping your initial spend at $60-65K. That's more than enough for a down payment using an FHA loan (just 3.5-5% down) while still having reserves for expenses. You'll live rent-free in one unit while the tenants cover the mortgage.
Here’s the play: do it for 12 months, then repeat each year for 3 years. By the end, you could have 10 doors — all while living rent-free. Use the cash flow from those properties to buy your "forever home" or just keep the cycle going. Before you know it, the whole portfolio is paid off by age 65-70, and you’ve got financial freedom without relying on Social Security. Or, better yet, scale faster and retire early.
It’s not easy, but it’s simple. House hacking works. Let me know if you want to chat more about it!
Greetings from Allentown!
I know its not the most appetizing way, but id house hack a 2-4 unit. Tough with a family, but it will grow and give you the quickest way to a paid off portfolio by the time you want to "retire." Especially in eastern PA where competition and inventory can be tough.
If you have 80K, spending 60-65 max should be your limit. This is plent to make a down payment and have some reserves for the house hack, and youll live for free. Do this for 12 months- us FHA loan to take advantage of the 3.5-5% down, and then do this cycle every year for 3 years. Next thing you know- you have 10 doors and only used 3 years. Use the net cash flow from those buildings to them buy your "house" and just let the system churn. Itll be paid off by the time your 65-70 and boom, no need for social security or retirement. Or keep building and retire your self sooner.
CORE Team | Realty ONE Group Supreme547 Reviews - Member since 2022 · 23 posts · 29 votes1y
@Jennifer Fernéz
Hello from pretty close by in Montgomery County...
U have a family, so your risk and are 40, so your risk has to be lower than the house hack suggested. You have 3 lanes to consider
1. Partner with another investor on a flip.
2. Find a multifamily that u can acquire and make a long term play on it.
3. Spend a few bucks to create marketing and get some deals that are wholesale opportunities and quick turn them.
- 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Don't househack, especially with a family. That's a great way to sacrifice your family.
House hacking works if you're ready to do it every 3-7 years and put 10-15% down, not 3-5% and doing it every 1-2 years. You'll run into DTI problems. Also, a SFH> 2-4 unit in almost in any area, especially HCOL. You can househack non-conventionally, but that's by renting the room out and the better way. Still with a family, that's a no-go.
$80k cannot get you at $400k house, you need closing costs + reserves. It gets you a $260-$280k house with "BP reserves" and normal closing costs.
You need to tell us what this $80k is and what your intentions are. Is it your actual savings or was this saved to invest, because there's no such thing as "excess" cash.
But ideally you don't tell us, you are just going to have agents pitch their city like @Julian De la Guardia & the sort. Rather I hope you had an intention with this, and therefore can answer it yourself.
- 1yGregory SchwartzBusiness MemberRental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
Ignore @V.G Jason. House hacking is the best. I'm house hacking right now, and my family isn't sacrificing. Actually, it's the exact opposite. We live in this nice house because I'm covering some of the mortgage expense with the income from the house hack. Guess what? If we move, we'll house hack again. Find a home with an ADU, garage apartment, or a spare room that can be Airbnb' ed.
Most importantly please be sure to keep money in reserve. Have both a personal and REI emergency fund because life happens.
Schwartz Realty Group5117 Reviews - 1yTim DelaneyPro MemberBuffalo, NY · Member since 2018 · 790 posts · 530 votes
As others have said, house hacking a multi unit is probably the safest way to grow your wealth overtime. If you want to be more aggressive though with much more risk you could consider a flip or BRRRR. Especially if you or someone you can work with has solid rehab experience. One other thing you could consider, if you have great sales skills and decent knowledge of your RE market, would be investing in some off market leads to try to wholesale - I personally don't love that option, but there are some people out there that have the right skill set for this.
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
@Jennifer Fernéz this probably isn't what you want to hear, but to "grow the quickest" - put it in a savings account. In RE the gains are very long term.
And if you don't have any experience, taking a big swing at a BRRRR or a flip right out of the gate is very, very high risk.
I don't know anything about you other than what you posted, so I don't know if house hacking would be a good fit for you or not. It is a good way to get started but can require some sacrifice.
You could try buying 1 rental in a decent area and seeing how it goes. But there won't be any return for 10+ years. Transacting real estate is expensive. Somehow that has gotten lost but it costs thousands and thousands of dollars just to buy a property.
- 1yJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
@Jennifer Fernéz
I started investing about 9 years ago when I was 44 years old with only 25k in savings. I found a rental I liked and paid 130k cash for it. I had no idea what I was doing. lol. But I've turned that one rental into more and more SFR by recycling the equity to scale up without using much of my own money. My cashflow now is about 19k/month profit off the rentals and it all started with finding a way to come up with 130k cash when I made a drunk offer (over email) to the listing agent on that first house. I was able to do a HELOC on my primary and tap into some of my Roth IRA $ (tax free) to come up with the 130k since all I had to my name was 25k in savings. Since then I've done a cash out refi on that rental to buy several more. I've actually done 4 cash out refis to buy 14 more SFR with zero money out of pocket by harvesting the equity in my houses that appreciated over time. So my advice to you to is to find something in your budget you can pay cash for now. Then do a cash out refi on that property later on to maybe buy 2 or 3 more rentals with 20% down on each. Then keep repeating this every 3-5 years. I've bought 5 houses from 401k loans too. So there might be ways for you to find more money to combine with your 80k to pay cash for a decent cash flowing SFR. And I've bought 4 or 5 houses from 0% interest for a year credit card loans so don't rule out those offers to combine with your 80k to buy something. Good luck!
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes1y
Love the question @Jennifer Fernéz! If you and your family are willing to house hack and use either an FHA 203k or homestyle renovation loan, the path of least resistance with the lowest risk, in my opinion.
If you didn't want to house hack you could try a live-in-flip with those same loan programs! Then you wouldn't have to have other tenants around if that was an issue.
Here is Chicao, we have a plethera of 2-4 properties that need to be renovated and do you happen to have a similar market in Allentown?
Quality Builders4.966 Reviews - 1yTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
Live in flip.
It sucks but you'll have a pile of tax free cash in two years. I'm 42 with a family, financially independent, and doing it right now. 4 of us are sharing 1 bathroom while we slowly fix up this house. It is not for everyone. It is exhausting to live in a job site and feel like you are bleeding cash, but we've done a couple of times and still think it's a good idea. It's low risk and tax free on the gain. You're just going to hate it sometimes. Like many things, on the other side of sacrifice, discomfort, and hard work is a large financial reward.
- Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes1y
Hi Jennifer! Congrats. I would buy a 4 plex for ~500K. Rent it out. Cash flow. Rinse and Repeat using the equity in the home.
- Member since 2020 · 351 posts · 329 votes1y
I was in a similar situation. What I did was buy a single-family home down the street from me which didn't need any renovations (although it did end up needing some cleaning). It's performed well (except for the air conditioner broke) but was also more work than anticipated.
Part of the question with regards to house-hacking is your current living situation. If you are living in an apartment, it's likely a great choice. If you already have a single-family home with your own backyard, it's going to be a sacrifice. Travis suggested a live-in-flip, which is similar as above. But it's a lot of extra stress living with small kids in a construction zone.
I will say, I am probably not repeating the process as the returns don't seem enough better than the stock market to warrant taking time away from my family. That's also what my friends in a similar situation concluded. But if you are set on real estate, go local in a nice area and, if possible, in the path of development.
- 1yTodd AndersonPro MemberReal Estate Agent · Cape Coral, FL · Member since 2023 · 392 posts · 175 votes
Jennifer,
As others have said you have to expand on your investing goals. Real Estate Investing is not a "get rich quick" situation. It needs a proper investment strategy to reach the goal you are looking for. There is no doubt that Real Estate is a great way to become wealthy, but it will take more than one deal.
At 40, you have time to invest and let your portfolio grow. Find a property type that you like SFR, or duplex-quad. Then find an area that you like. Many of the investors that I work with find that since they are not planning to manage the property investing out of state in a turn key investment strategy is the best route to good appreciation in a growing area and good cashflow.
If you are planning on investing $80k that is a great start for a down payment and is enough to get very favorable rates on a loan. Make sure as others have said that this is the number that you can invest. The investors that I work with find that they can get at good COC return on new construction. There is very little surprise maintenance cost and the builder can get rates that are way below the secondary market
We have an off market inventory of new construction properties in a number of areas that fit the goals of many investors.
Best of luck finding the best place to start.
- 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Travis Timmons:
Live in flip.
It sucks but you'll have a pile of tax free cash in two years. I'm 42 with a family, financially independent, and doing it right now. 4 of us are sharing 1 bathroom while we slowly fix up this house. It is not for everyone. It is exhausting to live in a job site and feel like you are bleeding cash, but we've done a couple of times and still think it's a good idea. It's low risk and tax free on the gain. You're just going to hate it sometimes. Like many things, on the other side of sacrifice, discomfort, and hard work is a large financial reward.
Unlike the @Gregory Schwartz guy, this is realistic. Granted, house hacking isn't as destructive as a live-in flip-- it's on the spectrum of uncomfortably while having a family.
While Gregory may claim it's awesome, I highly doubt it. Hopefully, I'm wrong but if not take into account for the families "house-hacking", it's an extreme and unpleasant sacrifice with a majority likely not happy with it. He's more than likely the exception, and like almost all of his advice it's biased and there's some screws loose. It's all preference though, and you need to know the risks and what you're entering before hand.
Live in flip would be a bit harder, for sure, but arguably the better of the two options on net outcome but also with sacrifices needing to be made. Pursuing a SFR in the fashion I mentioned above would be more amicable, but this depends on your ability to enter.
- Lender · United States · Member since 2020 · 1k+ posts · 499 votes1y
Partner with someone who also has $80k to invest. Go 50/50 on a $800k property.
- Member since 2024 · 4 posts · 1 vote1y
Quote from @Timothy Hero:
Partner with someone who also has $80k to invest. Go 50/50 on a $800k property.
Why? expensive properties don't usually cash flow as well as mid-range properties unless you're talking about multi family.
- Real Estate Agent · Mesa, AZ · Member since 2017 · 230 posts · 169 votes1y
I would study the different real estate investing techniques that you could comfortably afford to get into and find the one that interests you the most and go for it. There's so many ways to invest in real estate find the one that interests you the most and that's where you'll do the best.
- 1yCorey ConklinPro MemberInvestor · Member since 2021 · 129 posts · 209 votes
The best way to leverage 80k in this industry is based off of your skill set.
Are you handy? have a construction background? Do you have property management experience? Do you understand the in's and out's of the market you wish to invest? Have extra time to spare working on the business? Have banking or insurance connections?
If you are just a warm body with 80k and no applicable skillset, I wouldn't bother. Sweat equity is the best way to grow in this industry with that amount of money. If you don't wish to (or have the time to) roll your sleeves up and do some grunt work I would just stick to traditional investing. Don't let people tell you that this business is passive for someone in your situation, because that's not the case.
- Property Manager · Downers Grove, IL · Member since 2012 · 99 posts · 40 votes1y
The honest answer here is in this marketplace not knowing what you're doing the risk is high.
Knowing what I know now on the forums is totally different. I would invest in ugly houses that need lots of rehab work to build the equity and refi spreads needed to offset the work and preserve most/all of my initial capital. I'd DSCR into the property, and refi trad out. then repeat.
Best advice is to join or visit a local REIA meetup and start shaking hands.
- 1yGregory SchwartzBusiness MemberRental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
Quote from @V.G Jason:
Quote from @Travis Timmons:
Live in flip.
It sucks but you'll have a pile of tax free cash in two years. I'm 42 with a family, financially independent, and doing it right now. 4 of us are sharing 1 bathroom while we slowly fix up this house. It is not for everyone. It is exhausting to live in a job site and feel like you are bleeding cash, but we've done a couple of times and still think it's a good idea. It's low risk and tax free on the gain. You're just going to hate it sometimes. Like many things, on the other side of sacrifice, discomfort, and hard work is a large financial reward.
Unlike the @Gregory Schwartz guy, this is realistic. Granted, house hacking isn't as destructive as a live-in flip-- it's on the spectrum of uncomfortably while having a family.
While Gregory may claim it's awesome, I highly doubt it. Hopefully, I'm wrong but if not take into account for the families "house-hacking", it's an extreme and unpleasant sacrifice with a majority likely not happy with it. He's more than likely the exception, and like almost all of his advice it's biased and there's some screws loose. It's all preference though, and you need to know the risks and what you're entering before hand.
Live in flip would be a bit harder, for sure, but arguably the better of the two options on net outcome but also with sacrifices needing to be made. Pursuing a SFR in the fashion I mentioned above would be more amicable, but this depends on your ability to enter.
To be fair… yes, I likely have a screw loose. But after helping many people house hack, I’d still choose house hacking over a live-in flip any day. Both of my house hacks were enjoyable and lowered my cost of living, helping me survive tough financial times.
One of those tough times was caused by a live-in flip that went way over budget. House hacking lowers risk while a live-in flip can be a money pit with endless surprises. For first-time investors, house hacking is the smarter, steadier choice.
Schwartz Realty Group5117 Reviews - 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Gregory Schwartz:
Quote from @V.G Jason:
Quote from @Travis Timmons:
Live in flip.
It sucks but you'll have a pile of tax free cash in two years. I'm 42 with a family, financially independent, and doing it right now. 4 of us are sharing 1 bathroom while we slowly fix up this house. It is not for everyone. It is exhausting to live in a job site and feel like you are bleeding cash, but we've done a couple of times and still think it's a good idea. It's low risk and tax free on the gain. You're just going to hate it sometimes. Like many things, on the other side of sacrifice, discomfort, and hard work is a large financial reward.
Unlike the @Gregory Schwartz guy, this is realistic. Granted, house hacking isn't as destructive as a live-in flip-- it's on the spectrum of uncomfortably while having a family.
While Gregory may claim it's awesome, I highly doubt it. Hopefully, I'm wrong but if not take into account for the families "house-hacking", it's an extreme and unpleasant sacrifice with a majority likely not happy with it. He's more than likely the exception, and like almost all of his advice it's biased and there's some screws loose. It's all preference though, and you need to know the risks and what you're entering before hand.
Live in flip would be a bit harder, for sure, but arguably the better of the two options on net outcome but also with sacrifices needing to be made. Pursuing a SFR in the fashion I mentioned above would be more amicable, but this depends on your ability to enter.
To be fair… yes, I likely have a screw loose. But after helping many people house hack, I’d still choose house hacking over a live-in flip any day. Both of my house hacks were enjoyable and lowered my cost of living, helping me survive tough financial times.
One of those tough times was caused by a live-in flip that went way over budget. House hacking lowers risk while a live-in flip can be a money pit with endless surprises. For first-time investors, house hacking is the smarter, steadier choice.
It's a lower barrier to entry. That's not synonymous with a smarter, steadier choice.
The smarter, steadier choice is really before the investment and defining intentions and current situation. If in a family, maybe besides yours, live in flip and house hacking are significantly a harder venture. And a harder venture is likely not smarter or steadier, I won't deny the outcomes if one sees it through. I just wouldn't recommend something most cannot commit to.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.