First-time investing in RE

[Tuyen Tang]

Hello everyone! I’m new to BP but I am not totally new to RE (went through a lot of online videos on real-estate, read Rich Dad Poor Dad, practiced with calculating properties to see whether they cash-flow or not).

So, my main question is that my mom will be able to have some capital to invest into the market in about 3-5 months ($50-60k). I want to know what my best options are in terms of types of rental properties I should be looking for.

Budget price for a property: $200k max

CAP Rate: essentially my mom wants around 6-8%+ return.

Ultimate Goal: to have cashflow $40k+/yr within the next 15 years.

We also are not interested in the buy and flip strategy as my mom wants passive income through renting out. Right now, we have 1 SFH rented out, I managed with tenant screening as well as addressing any issues the tenant might have, along with picking up rent payment. That rental property we have is paid off and after all the fees and saving funds leaves us around $10k in profit.

She also wants me to be the one with the title when buying, but it is also hard for me to get a loan with moderate interest rates since I’m currently 20 yrs old college student with no job.

Any advice from other local investors or anyone who is experienced in RE would be greatly appreciated because I want to know what the best route to take to get the best return in terms of passive income over the long run (10-20yrs).

[Chris Hopper]

Buy something with hard/private money, fix it up, and refi it with portfolio lender that is asset based only and doesn't look at income.  You can get 30yr fixed around 5.5%.  You should reevaluate your goals too.  $40k/yr in 15 years is ridiculous.  With 50-60K you can hit that number in 2-3 years (or less).  Unless you're wanting all free and clear properties.  That's only 10-12 properties.  If you only bought 1 house per quarter you'd have 12 in 3 years.