How much money to start REI

Hello All,

Excellent forum, very helpful discussions - Thanks

I’m very new to REI, 1 week & counting and have been reading like crazy. The question I have is as a newbie in REI how much money does one need to get started?

First…establish your goal(s). What do you want to invest in RE for?

Then go and get a book on RE investing, there are plenty of links here on this site. As someone here once said…“run, dont walk to the nearest bookstore…”

A ballpark minimum would be the closing costs or a portion thereof, appraisal fees, earnest money…

But in my opinion you need to do some reading on RE investing, after you figure out your short and longer range goal. That will define the kind of money you will need.

Hello NoMore925,

My short term goals would be to do several “quick cash” type deals to build available investment capital and then get into cashflow. Sorry for sounding like such a newbee! Do you have any recommendations on what books to read and courses that would give me solid foundation in REI?

Thanks in advance

You can get started very easily by doing the following. Start “Driving For Dollars”. This is what you do. Pick a neighborhood in transition. Drive around and write down the addresses of all the vacant, boarded up or distressed properties. Try to get at least 20 addresses. Then come home and run a title search thru the tax records that should be available online thru your county. If not, sign-up for a service thru someone like Dataquick or First American to run your own title searches and comps.
Then start sending letters out to these people. Make sure to send at least 2-3 letters as the fortune is in the follow-up. You can really be agressive and even attempt to call these owners by looking up their phone numbers on or

I hope this helps you. Don’t forget to join your local REI Club. Start networking with other investors. See what they are looking for. Maybe you can wholesale them some properties. Maybe they will let you tour their properties that they are rehabbing.

Best Regards,
Jeff Adam

Hey Jeff,

Thanks, great ideas - I’ll start trolling tomorrow.


I thought you just wanted some specific information on costs of which it would depend on your plan.

For example if I were to drive for dollars in LA county I would expect to pay a grip for gas, then using the county website to research properties would look something like this

Monthly fee of $100 for maintaining the account, plus $1.00 per inquiry/screen.
Sign-up fee of $75 for the dial-up access. After signing the agreement, the Customer shall establish a $200 trust account with the Office of the Assessor.

300.00+ off the top.

Add to that the costs of my first post above(appraisal…etc)…and it is approaching 1$600.00. to $2000.00.

There are ‘creative’ ways to get some of that paid by the seller or your lender.

I got my first rental property with just $1 down – 100% financing, and seller paid all closing costs.

I got my second rental property with 95% financing. Downpayment and closing costs came to about $5K.

Does not take much to get started, but the amount you need depends upon what you are doing.

Dave T, I’m also new to REI and would like to ask you to exaplain in more details about how you got your first rental property for $1 down - 100% financing, and selller paid closing costs. I hear this all the time, but still can’t figure out how exactly this works.

thanks in adance and appreciate for all your valuable info!!

Simple, nothing mysterious here. I used my VA loan entitlement. The builder offered to pay all closing costs, to include loan points, as a promotional incentive to move his inventory.

I used the house as my primary residence for about six months, then got transferred. I converted the property to a rental and kept it in my rental portfolio for 8 more years.

My second rental property was also purchased as an owner-occupied property with a 95% ARM loan. After an appropriate period of occupancy, I purchased my third and fourth rental properties the same way.

My first investor financed property happened in 1986 when I got a bank REO. My next several properties were either HUD or VA foreclosures. I even got one VA foreclosure with 97% VA insured financing, though VA usually required a 10% downpayment for investor financing.

Today, I am upgrading my rental portfolio with 100% financing for the purchase AND closing costs using a blend of new mortgages and 1031 exchange funds.