Hi, I know theres not a simple answer to this. But how much do you guys reckon I would need to save around to get started as a REI? I am currently just saving and building credit rating. I want enough to get some mentoring too, so how much you reckon guys?
It really depends on what type of investing are you looking to get into, flipping, wholesaling, landlording…etc. and how you plan on buying the properties. What are your plans? do you have monthly income?
also what area are looking at ?? what are the properties selling for.
you should be able to figure this out. we cant do it for you.
adz888 - this is a very good question… and I don’t think I know the answer… However I believe you need to save enough to be able to execute your strategy but not too much that you never do a deal because you feel you need to save more money… :O)
The numbers that make me comfortable are:
1 - enough money to pay the mortgage of the investment property for a full year (in case you screw up big time and can’t cash flow the property). To be able to do that I am looking for properties at 40k to 50k.
2 - enough money to pay for the repairs - when you are buying properties for 40k or 50k you will need money for repairs… It comes with the territory… :O)
3 - enough money for down payment - I am trying to get 100% loans based on the discounts of the properties I am looking at… However I feel comfortable that I can put 20% down if needed.
4 - I would be even more comfortable if I could buy cash + pay for repairs out of pocket. However I feel that by having the 3 items above I am ready to go…
I hope this helps… Good luck!
First thing is to figure out what you want to do like fadi said. See what kind of price range you’ll be looking at. After you decide that, start calling around to some banks and ask them about different loans. Make sure you tell them it will be for non-owner occupied if you’re doing stuff like rentals. See how much different banks require for a down payment. That’s your first number. Then see how much you’ll need for closing costs for that loan. Then you’ll have to consider other things like money for rehab & repairs, carrying costs, etc. If you’re just starting out, it will probably be difficult to get an accurate estimate for repairs. You definitely want to have some money set aside for the extra things that may come up too, but by checking for a down payment percentage and closing cost estimates you’ll have a starting point for your savings goal.
Basically I am just doing that “only one in 100 people will do this” advice. I just wanted a rough figure of how much I will need for a down payment of first property and some mentoring. Might decide to work longer than a year if I need the capital.
First found out what you want to do. Wholesale ( find property,find buyer,get in under contract.Get 3,000-30,000 fee). Or buy and hold etc etc
Anytime, someone asks me what they should do about getting into real estate, I tell them 3 things. First, Learn your craft well,,educate yourself. Secondly, get to know your local real estate market. And number 3, biuld a team of business related individuals to work with (win-win),,private lenders (not hard money lenders) realtors, contractors and real estate lawyers (and everyone get paid when or after the deal closes). Understand that you dont have to be a jack of all trades, you are only a deal maker,,thats it! You have to have a fundamental understanding of the way things work of course but you leave the work to those individuals that are paid to do what they do. Believe me, if you know how to get the right deals by working with realators who "specialize" in what you are looking for, there is alway plenty room for profit. Ive spent yrs studying Real estate before i ever even bought my first property. Hope this helps a bit or at least gets you going in the the right direction.
Getting private money (from everyday people) to invest in your deals is not a hard sell at all for the avg guy with a cd return of 2-3%. Not when you can offer them a set 12% return while collateralizing there investment with real tangible property worth substancially more than there investment. Look into private mortgage lending courses. I recommend Alan Cowgillls courses. You can buy them much cheaper on Ebay as well.
If you have any other questions, PM me. I always love to help out those who are sincere about getting things going.
All the best to you.
It depends on your situation. I did not have any money when I got started. I had a bunch of money in a 401k a few thousand in various other investments and come cash. What I did have was income. I made enough money and had a lifestyle that cost little in comparison. I had cash flow enough to pay all my mortgages if all my houses were empty.
I still don’t look at money I look at lifestyle. Lifestyle is funded by cash flow. I have lately been asking my friends if all millionares are rich and are all rich people millionares. The answer is that the 2 are seperate and distinct states of being. I work with a lot of millionares. They have a net worth of over a million dollars. They are not rich. They are upper middle class. We all have big houses, fancy cars and vacation houses. But if they lost their job today they would soon spend all their net worth maintaning the lifestyle get a job or scale back. They are not rich. A rich person can maintain his lifestyle even if he has no job. If on the other hand they borrowed a billion dollars and bought the Empire State building they would no longer be a millionare because they would be a billion dollars in debt. But they would be living on the income of a billion dollar asset. They would be rich.
So when you ask how much to get started, I say establish a target lifestyle (using a job) and then start investing in real estate.
well 1st thing i would do is find out what kind of loan i qualify for right now.
then i would start looking for properties i could get that would me money one way or the other.
this is not rocket science guys. its trial and error. be cautious but dont be scared.
I think too many people want a blueprint on how to invest into real estate like theres a big secret to it.