All Forum Posts by: Raeshelle C.

Raeshelle,

I empathize with your situation and I love your positive attitude.

I lived in Massachusetts (Natick, Lowell and Somerville) for 8 years and I was a real estate agent for two of them. Real estate in MA is expensive, and finding cash-flow-positive properties can be very challenging and competitive. I had to look outside of MA to find a good deal that I could afford. I bought my first property 5 years ago with $35K down. It was a single-family turnkey rental in CA. This year I sold that same property (using a 1031 Exchange to avoid capital gains taxes) and used the profits to buy 12-unit building in AK that is cash flowing $24K per year. I have bought turnkey properties in AZ for as little as $20K down that have all been consistently cash flow positive and have since doubled in value.

Here is my recommendation for you:

• Get a real estate agents license in MA – you can become a licensed agent in less than 2 weeks for around $500. http://www.massrealty.com/articles/how-to-become-a-real-estate-agent-in-massachusetts
  • You can earn extra money to save for your own investments
  • You will get experience in the process of buying, selling and bargaining while working with an experienced team
  • You will gain valuable insight into real estate market in your area
  • It will help you to build your network in MA
  • You can be an real estate agent part time on your own schedule while you keep working on your film career
• Keep looking for turnkey deals all around the country. You typically make less return on investment buying “turnkey”, but turnkey in other states may have better returns than you can find in MA.
• Keep searching for deals in MA. Look for 3 or 4 unit apartments that you can buy with only 3.5% down using an FHA loan. These will be your best option for cash flow properties in MA.
• Keep saving your money, and keep believing.

Success will happen for you when your preparation meets the right opportunity. 

Personally I think the best way to invest that amount would be to pay/partner with an experienced investor and profit split. That is basically what I decided to do and it has accelerated my progress exponentially. I did have a little more in my account than you do but I don't know what your expenses are. Im sure you could partner with a very experienced investor for 15k and learn how to fish which would be a smart investment. Barring an unforeseen catastrophic change in the way our economy works, you acquire skills that can produce income your entire life. Look into it. God bless.

@Raeshelle C.  I am just trying to be real. here In all the humbleness I can.

I started lending in Detroit in 2001... I have lent in Memphis  B ham  Jackson  Indy KC

Chicago ( south side) you name it I have been where there is cash flow homes.

and for better or worse low end cash flow homes are tough.. they just are.. its reality..

So no reserves are suicide for an investor.. and thousands if not hundreds of thousands lost their rentals from 08 to 2011 because they did not have adequate reserves to handle bad tenants non paying tenants etc. 

So just keep your cash near and dear ..

there are so many other ways to make nice income in the US other than being in the rental game.

I see the rental game as a thing for those with high paying jobs and a slice of their portfolio I do not see it as something someone can retire on.. unless you make a ton of dough at your day job and can scale.

one of my vendors in Jackson MS I have funded about 200 homes for them in the last 3 years.. they are just now starting to be able to take cash out.. these are all assets EXACTLY as @Lisa Phillips describes. C class working class areas .. with a heavy dose of Section 8  single mothers and their children. 

you want a business that brings you cash flow..  think subway sandwich shops.. save your dough and buy those.. after 5 years each shop will be throwing off 100k plus net.. This is a business you can scale.. rentals very tough and not realistic for most.

I learned a lot from this post, by the way when you post something publicly it's not yours anymore stop being selfish we're all here learning otherwise we'll be out there with a hammer and a saw

Work backwards from your goal.  It appears you want to retire at age 40 with $10K/month in income for the rest of your life (the Social Security Administration estimates that the average 27 year-old female will live to 83).  

So we open an annuity calculator and plug in those numbers.  As for interest, let's use the wildly optimistic 10% (which happens to be what Bernie Madoff promised investors in his ponzi scheme):

So you need to have $1.2 Million by the time you are 40 -- and that's assuming a 10% rate of return.  Use a more conservative 5% and you get $2.1 Million:

OK, so what kind of CAGR do you need to turn $22,500 into $2.1M over 10 years?

For comparison, here are the long-term rates of return from some of the greatest investors of our time:

Warren Buffett:  29% over 13 years

Peter Lynch: 29% over 13 years

Michael Burry: 22% over 8 years

Charlie Munger: 20% over 13 years

Bill Ruane: 18% over 13 years

This should illustrate how unlikely you are to passively turn $22K into $2M in 10 years (e.g. turnkey investing).  Of course, you'll run into no shortage of charlatans promising exactly those types of returns -- so buyer beware!

@Jay Hinrichs - WRONG. Dont go into ANY market under capitalized, not "Markets Lisa Phillips Suggests." Just wrong if you think thats specific only to lower priced neighborhoods and not all markets. 

 So, that means dont go under capitalized if its a 150k home (which can literally end very badly for many many years - how can you make up for a mistake that large), and dont go into for a property you paid 20k for under capitalized (which will set you back significantly less than a 150k or 100k mistake). 

Like i mentioned, we're doing very, very well in our group, but we understand what this is about. This is NOT for everyone, so if you're uncomfortable with the idea, don't do it, but don't put your uncomfortable feelings on everyone who are quite comfortable in those neighborhoods.

@Raeshell

@Raeshelle C. there are a lot of strategies, see which one resonates financially and to your comfort level. People hold their noses up in the areas at the neighborhoods I teach about investing in, but I came from those neighborhoods and we're doing just fine in my sub30k group.

@Raeshelle C. 

@Hazel Wiggs

Ladies, I am just reading this trail and to be perfectly honest with you the theory that you need to save to buy is a rather outdated one.  When I started, I leveraged my credit and did not even use my own cash.  I did this to purchase property out of state (I am located in New York).  I am seeing a common theme here that quite a few individuals do not understand the different aspects of leveraging.  I am by no means knocking on the "save and buy" method but there are many people who have done extremely well in real estate and did not use that method.  Hope this helped a bit.  PM me if you have any further questions.