OfflineI want to preface this by saying this is my first deal I'm setting up.
I'm 22 finished with school and working. I have 65k saved and car is paid for. Credit is 749 and have no debt whatsoever. However, haven't been at my job for long.
I'm moving out of my parents home in Feb-June to get my first home. (Getting married the following November). I want to have this home ready for when I get married(She won't live with me until we're married.)
My original plan was to put 65k down payment towards my home and have a 15 yr mortgage with low payments.
An investor I spoke with suggested not putting ALL the 65k in one property. "You want to be an investor right? Don't put all the eggs in one basket."
There is a package deal of 2 homes for 24k that currently have tenants and both rent for 600 and 450.
Would you do something like this and put rest towards a home?
What would you do in my position?
Don't be mad that roses have thorns, but be glad that thorns have roses.
The first thing you should do is complete your profile about yourself and where you are. Seasoned investors, myself included will tend to overlook your post unless your profile is filled out. This will help you in the long run for sure.
With the cash you have in your war chest, you are steps ahead of the pack.
Your investor friend is correct in telling you not to use all your cash on one deal. A savy investor plots his course ahead of time concentrating on OPM. Buy and holds are a great way to start building monthly cash flow that you will need in this biz. You might also look into unsecured lines of credit with a credit score like yours. Take your time, plan your action steps and you will come out on the top. Much success to you...Jan
I appreciate your comment. I'll go and change the profile around. I had to delete everything because after calling and getting a buyers list together, the investors started googling me and found me on this website and no longer wanted to have anything to do with an "informercial scam artist." Their words not mine.
So despite this issue I've always been faced with a new living arrangement. Instead of getting a house, I plan to get an apartment while possibly doing lease options and rentals to make the additional monthly income.
I've got a meeting this week with a realtor and he wants to discuss an action plan.
I was going to get him to do Matt's 25:1 strategy and do assignments. So in the meantime, do I need to be calling buyers and figuring out what types of houses they want?
Don't be mad that roses have thorns, but be glad that thorns have roses.
Jimmy, the first thing you need to do is forget that you have that money. Tuck it away for now, preferably in a bank or a good cd and learn the ropes of REI first and then when you’re ready you can use your money for some real good. If you go waving it around in front of everybody it will be gone and you may not have anything to show for it. That's going to look real bad to your new finance. You have your whole life in front of you don’t be in a hurry to spend it all. Information is the largest part of the arsenal that you are building. Keep building and saving and put that money to use when you really know how.
Kris
Kris
Experienced Investor of 12 years
Thanks for the helpful reply. I've learned that the hard way a long time ago. When people know you have money, you become a bullseye and everyone will try to get your money.
Thanks I appreciate the words of wisdom.
Don't be mad that roses have thorns, but be glad that thorns have roses.
The way to suceed in this business is using OPM (other peoples money)not MM(my money).
Kris
Experienced Investor of 12 years
You can use it to lock up deals, put chunks of it as down payments for several buy and hold properties, you could use it to flip properties, you could use it to put down option fees on a lease option deal which your tenant buyer would pay you back anyway....Of course don't use it all on one deal(unless it's a really good one). But my point is you can turn that into so much more money by utilizing some of it.
I'm all for using OPM...But I would take total advantage of having that money in the bank. DONT JUST LET IT SIT THERE!!! If you find a killer deal with tons of equity and you need the money to lock that deal up, USE IT!!! If I came across a killer deal and needed to tie it up right away..I'd have no problem throwing the whole $65K at it if need be.
I personally would use it to buy and hold multiple properties...If this is something you're interested in, search for a local bank in your area and see if they'll work with you on financing based on the actual value of the property.
Best of Luck
Jordan
Ps...Before you use any of the money you should of course do your due dilligence on any deal by knowing the true value and all the repair costs
that are going to be required. If you do this you should be alright.
"You gain strength, courage, and confidence by every experience in which you stop and look fear in the face. Do the things you think you cannot do. Tough times never last, but tough people do"
Before you use that money in a deal, go check out one of Dean's Edge Event weekend seminars! I went to one and it totally jump started my RE career and gave me huge insights into how to use my money, protect my money, and structure my business entity. It's also a good place to find someone to partner up with and teams always accomplish more than individuals. I'ld rather have a handfull of like-minded individuals (regardless of money) working with me than one guy with money (regardless of like-mindedness).
Cheers and good luck!