I have saved 10k and have Good credit, what now?

Question

Hi everyone I’m new to this site and it looks extremely helpful, and I’m just looking for advice from any and everyone.

I’ve been saving money without really having a real plan other than having thoughts about owing property and work my way to financial freedom for my fiancé, son and myself. I’ve told myself once i’ve saved 10k i can can start making moves but I’m unsure what the next best step would be. I would appreciate any advice or ideas. The Goal is financial freedom.

I also have great credit if that helps

Aseel Yerunkar · Answer

@Brandon Gee Congrats on hitting that savings milestone.

As others have mentioned I highly suggest looking into house hacking via a low down payment loan.

HOWEVER one thing I have not seen others mention is to make sure that IF this is your only form of savings -- keep an emergency fund. The rest you can invest. But you should figure out how big that fund needs to be based off your lifestyle. Maybe it needs to be 5k? Maybe it needs to be 10k? In which case I would keep on doing what you're doing and save up another 10k and then invest it.

Hope that helps man. Hit me up if you have questions!

Kat W. · Answer

Welcome! Often a good place to start is a house hack or live in flip. We did the latter. As your primary residence, you can likely get a loan for 5% down.

Chris Majors · Answer

@Brandon Gee I've never bought a multi-family and lived in one of the units.  By the time I started investing in RE I already had owned single family.  I have however kept a couple single families that I've lived in as rentals instead of selling.  It's another good strategy to have more favorable financing for rental property because lenders will give you better terms as an owner occupant versus an investor.

Brian G. · Answer

@Brandon Gee what Kat said, imo house hacking is the very best strategy to begin with if you can do that where you live. Advice: buy *the most desirable asset you can afford* since that is the single factor that will increase your likelihood of success over time. Read “Set for Life” and the book on House Hacking, both are BP published. Excited for you! Reach out if you ever want to hop on a call. Nothing to sell. No angle. Just dm me.

Chris Majors · Answer

Grats on the savings and mindset!  If you are currently renting, a great strategy would be to buy a small multi-family (1-4 units) with a low down-payment loan, live in one unit, and rent the rest.  In most markets this will allow you to save most if not all the rent money you would be spending to someone else and cut your teeth as a landlord.  Get something that needs updates, but is in "livable" condition to qualify for financing.  If it needs updates you can do those slowly to increase rents and property value.

Even though flipping houses is more glamorous and you can potentially make money quick in big chunks, rental real estate is the path to growing wealth.  The IRS encourages us to be long term investors, particularly in rentals, and discourages quick flips with the way we are taxed.

Brandon Gee · Answer

@Kat W. Definitely! i was once thinking about a live in flip thanx for bringing it back to my attention

Kyle Howe · Answer

@Brandon Gee The first real estate experience I had was a live in flip. I bought it for 38k, moved my buddy in for $250 a month, then sold it for 65k. Profiting $24,900.

Initially my goal wasn’t to invest in real estate, I just wanted to flip my way to a nice house. Only took my three houses but I regret not doing the BRRR method and keeping them all as rentals.

So my advice would be do a live in flip. Primary residence you only need 3.5% down for FHA loan. You do have to live in the property a year. Then either sell it or pull out the equity to buy more real estate.

Richard Ochoa · Answer

I would use that 10k on a low money down loan for a Duplex, then you can add you current rent/mortgage to your monthly savings and start getting experience as a landlord. The sooner you do this, the faster the 1 year loan requirement will be fulfilled.

Brandon Gee · Answer

@Aseel Yerunkar Bro I really appreciate that input especially when im the kind of person who likes to play it safe. Before hitting my goal 10k sounded like a lot of money for someone like me lol....

And thanx for letting me reach out

Brandon Gee · Answer

@Chris Majors thank you for that Chris thats really a great idea. I’ll definitely keep my eye open for deals like that. Have you done this before?

I have saved 10k and have Good credit, what now?

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