What is the best way to start in real estate investment and acquire properties fast?

Question

I want to start investing in real estate. I have around $20,000 cash to start with. I am 37 years old now. I would like to know how I can take that $20,000 and invest it to be able to buy second, third, properties and so on. I don't want to be paying a note on a property for 10 to 15 years before I can purchase another piece of investment property.

Is it best to invest in multi family, single family, or commercial properties and why?

Is it best to invest in forclosed, distressed, or new properties and why?

Is it realistic to do like the guys in the TV show "Flip that House" starting with $20,000? If so how can it be done?

Finally, If anyone has any good resources with information such as websites, books, etc., please give me that info also.

Thanks for your help.

Answer 1

I don’t know how much attention you’ve been paying to those house flipping shows but the successful people are experienced so they have a clue where to buy, how much to pay, what changes to make and then have good relationships with agents who can property market the homes.

The inexperienced nearly always fall flat on their faces because they think it’s easy money. They fail to work with a buyer’s agent – just assuming they’ll pick  a good area and pay a low enough price. They don’t get inspections so they don’t have a clue what’s wrong with the house. The over or under improve properties because they don’t consider what a particular neighborhood demands.  And then when they go to sell, they pay no attention to actual market values and instead come up with arbitrary numbers of “I spent X for the house, Y for improvements, and I want a Z profit.” If you want to sell, what you spent is irrelevant. You must price the home according to market conditions.

It the sort of venture where you should expect to lose money early on. If you’re lucky & intelligent, you can learn from your mistakes and eventually find some success. A key would be to develop  a strong relationship with a real estate agent, who can watch for deals for you, advise you on what changes to make in a home, and give you an idea of a home’s eventual selling price. They can also answer your questions about what types of properties make the best investments in your area.

You’ll also want to seek out reliable contractors that you can depend on project to project, unless you’re certified to do plumbing & electrical work. I would also research building codes & permit requirements for the area(s) where you want to invest. There’s nothing like getting into a project and then realizing you can’t more forward for weeks because of permit issues.

Answer 2

You don't need the $20,000 at all.  But it makes you look "strong" to a mortgage company.  You could buy your first house today with no money down.  If you make timely payments on that house, the bank will loan you money for a 2nd house.  Read all the books at the library about being a landlord.  I have been a landlord for a long time and i'm good at it.  You can do this. /

Answer 3

I'm suprised you aren't asking about the latest Donna Summer record or where to buy the hot, new AMC Gremlin...

Everyone knows the days of using the banks money for real estate investment are gone. They might come back, like Donna Summer, but those days are not here now...

With the paltry amount you have to invest, you would need to find a $30k home so that you could put half your money down and have the other half available to do renovation work on a non-owner-occupied property. The fact you seem not to know that shows that you do not have the experience needed to renovate and sell properties in today's market.

My neighborhood is littered with homes that were renovated by people who watched HGTV and thought they could do that. The houses do not sell, as people recognize a non-professional job. Eventually, the house falls into foreclosure, get sold to someone with a clue, fixed, and sold. There are some homes like that here which have been on the market for close to two year. (I know this because I looked at some of them when I was house hunting back then.)

Two of these properties were actually featured on flipper programs. (We also have the Flip This House special where the investor had the home fall into foreclosure before the renovation was completed.)

With lenders requiring 30%+ down for investment properties and not lending to investors for renovations, your plan would only work with hard money. That is akin to going to a loan shark, without the safety of borrowing from the mob.

Better you light the money on fire. You'd lose the money either way, but at least by lighting the money afire you won't get splinters.

Answer 4

ok ...kid come down to reality , in real itz a very risky business. i suggest u invest in sum gulf country like dubai where the return is around 140% yearly appreciation