can you go from renting to real estate investing with 35k?

Question

I have never owned a home and imminently want to get into real estate investing/flipping/renting.

Background: I am newly 24, my wife and i make roughly 35k a year jointly, but in the next year with already confirmed jobs from our new degrees we will be around 75-140k jointly (if we both work full time or she works full time and i focus full time on real estate) . We will be moving to the NW, Oregon/Washington area.

I can comfortably make a down payment right now of 35k with options of a VA loan.

With some history in carpentry i imagine to buy an ugly and cheap duplex/Triplex/ext.. renovate, live in one rent the other.

My other venture would be single family homes, flip/wholesale until the margins allowed me to buy in cash and rent these properties.

My question is basically what do you think of the ideas and could you bring some prospective or insight to this thread.

Jeff Filali · Answer

@Dean Belcher that's a good start. I started with only $30K saved 18 months ago, and now do real estate investing full-time. Read my story on my BP Blog posts below.My First 12 Months as a Real Estate Investor…Here’s my story…andThe Story Continues…18 Months Into Being A Real Estate Investor

Alex Lucille · Answer

Strategy depends heavily on which markets you know/have the ability to invest in. Start by figuring out where you want to invest then figure out the best strategy for the area. I'm in seattle, the only way to make money here as I see it is to flip or go north to Everett or south to Tacoma for some meager buy and hold rental opportunities. You may have a big advantage living in an area where cash flow properties exist and there are opportunities for forced appreciation that you can do yourself. Brrrr is almost always the way to go as long as rates are low. You can also look to partner with investors in seattle who are looking for someone willing to put some skin in the game and can also pm the property. Start looking for deals in your area Feel free to shoot me a message to chat more, I would love to learn more about markets outside of seattle but still in washington.

David Sweeney · Answer

I suggest house hacking with a multi-family home. Buy up to your maximum you can afford with your down payment. Then take in renters who will make the loan payment for you. Here's an article from Brandon Turner on how to do it. You'll still have to figure out where to live. Obviously, you have a lot of options if you are considering two different states. Worst house in the nicest neighborhood is oftentimes a good strategy. Location, location, location...

Todd Fithian · Answer

Man I started with $6k in a Roth IRA and managed to get a house hack duplex in Southern California. Granted it was 2 or 3 years ago, but we made it work with sweat and tears man. Never looking back. Do it! I like that saying "dont say it can't be done, but how it can be done!". Somethin like that..

Matt K. · Answer

Focus on your new job(s) and get some documented work history.... get off probation, see if you're even a good fit for it. Then you'll have the documented income/wage history to get the proper loans. DO NOT bank on getting a job and go all in... one "minor" repair could easily wipe out your dreams and down payment.

Patrick Britton · Answer

typically house non-owner occupied you need 15% down. overpay and ask for cash back at closing to act as your reserve/emergency fund.

Dean Belcher · Answer

@greg moss im looking at a house that is 64k (foreclosed) the market values it at 68K. Houses in the same neighborhood range from 54k-140k you could live in this house immediately, but if flipping which is what id like to do here you probably need around 2k just to tidy up and add a little value or could go extreme and probably put 10-20k to have more interest. thoughts?

Greg Moss · Answer

well on a typical house for investing with a conventional mortgage of 25% down you are looking at properties around 140k. Also just have around 5-6k for closing costs and then the emergency fund. This is more the buy and hold rental method. Clearly costs will be different if you are buying and flipping.

Taylor Hazard · Answer

Agreed with @Alex Lucille. If your ultimate goal is to make RE your profession you should strongly consider your location as it relates to investment criteria. I'm also in Seattle and recently lived in Denver, two cities with exploding real estate values such that it is difficult to find properties that cash flow without looking in the fringe cities such as Everett, Tacoma or even Olympia in Washington or Aurora, Fort Collins, Colorado Springs in Colorado. Your current market (Tuscon) will provide far better opportunities from a pure cash flow standpoint but appreciation wont be near what you will experience in the Puget Sound region; i.e. Seattle is probably better from a buy and hold stand point and Tuscon for cashflow / flips. Whichever route you choose start by networking into the RE community, I would encourage you to take @Alex Lucille up on his offer to chat. Im also happy to help if you want to reach out.Good luck!

Jonathan R. · Answer

I think investing with 35k is an excellent idea. I started with like 15k and am not looking back any time soon. As far as insight, look in C class areas. Look for a return greater than 1%. So, if a unit is all in for 50k you should be receiving more than $500 a month in rent. Do not overspend on the rehab but provide a feature or two that will attract a good tenant. For instance, I retiled the bathroom and put in an accent tile- it looked nice and didn't break the bank. Watch several podcasts. Fall in love with many properties. Offer well under fair market value. Jump in and have fun doing it.