I Have $120,000 to Invest.

And I’ve decided to invest it in real estate. Since I’m, pretty much, completely new to the field, I’ve only read a couple books on it (even though I bought dozens cause I’m constantly educating myself on all forms of investing), and I’ve yet to join my local REIA group but will next month, but I was thinking of just getting my feet wet by trying a short sale or two and seeing how that goes. I’m only 20 and I’m from central New Jersey and I don’t have any bills to pay except a monthly cell phone bill and gym payments and my job more than covers those, so I have the entire $120,000 to invest. Do short sales and flips sound like a good start or does anyone recommend I take another route? I don’t plan on just doing flips all the time, though. I’m just trying to get enough money to make more, bigger, and better deals. And having a decent amount of pocket change doesn’t hurt.

Howdy King:

One scenario I like is buy, rehab and refinance and hold for cash flow. I took a $500 hot check and bought a $165K building and borrowed all the money to rehab it and at an appraised value over $700K I will finish the project and pull out $150K and still have a positive cash flow with a $600K loan. I am doing the same with small cheap houses. I did one for $20K and it is rented for $500 per month. I am having to borrow and pay up to 36% but well worth the expense. I do not believe you have $20K homes in your area but you should be able to do some deals that work.

Do you think it’s possible for me to invest this 120K into multiple properties?

Do you think it’s possible for me to invest this 120K into multiple properties?

Easily. If you could put 20-30% down on a home and get conventional financing on the rest, you should have no problem (even without excellent credit). If houses average $150k, that’s about 3-5 houses you could buy doing it this way.

My suggestion would be to use the money for reserves only. Try buying houses using the least amount of money possible. For instance, try to pick up some Sub2’s that require little, if any, out-of-pocket expenses to purchase. Use the $120k to cure any arrears, acquisition costs (inspection, appraisal, title), and carrying costs.


Put as little down on as many good deals as possible. Diversify, and always have a planned exit strategy. DON’T put all your money in one basket. Best of luck to you.

Da Wiz

Yeah, that was my plan. To invest as little as possible into as many properties as possible as long as I can make a decent profit off each one of the properties. I was, basically, just wondering if other investors with more experience had the same idea cause it seemed like a good idea, to me, but I wasn’t sure if it could work out. Thanks for your advice, everyone that replied so far.

Invest like you have NO money!

Some of the worst deals that I’ve seen has been where the investor had no problem getting the money for the deal.


so where do you currently live??? at the gym? Buy your own house first! consider a fixer/rehab or perhaps something that you get cheap (HUD, preforeclosure, etc), live in a few years and turn it over. Very easy to turn around and get an equity line against your primarly residence.

If I were to start with 120k

  1. I would put 2k at the Title Company to use as earnest money on multiple properties…
    (that way you just write on the contract earnest money to be held by _________ title company and use it over and over I have been using the same money for 3 years now)

  2. Buy houses 20% below appraised value

  3. put down 20% of the 80% offer and get at least 10 properties.

  4. Run ad’s EVERYBODY qualifies or I will give you $10,000.00 w.a.d.
    (with applied down Then if they do not qualify you have a way out “Its not my fault you did not have 80% down)

  5. Carry the 20% at 13% interest so on a 200k house you carry 40k (which was never your money anyway)
    This will create a residual income of $400.00 per house per month not a ton of money on the other hand do ten of them and make an extra $4,000.00 per month do that ten times and create an extra $40,000.00 per month not to mention you will create 4,000,000.00 dollars in notes!!! And there is no ownership reapirs involved!

But that is just what I would do!


Congratulations on choosing real estate investment as one of the tools to invest your money. Because you are new to the real estate investment arena, I suggest you consider the following guidelines:

  1. Put away $12,000 as reserve in some kind of interest bearing account. DO NOT use this money, except in case of emergencies.

  2. Open a Roth IRA with the maximum amount allowable, about $4,000.00. This account will establish your “retirement” account. You’ll be able to use the money for RE investment. Consult an accountant or tax attorney before opening the account.

  3. Purchase a home for “yourself first.” Because you’re a first-time homebuyer, you should be able to get in with no- or little-money down. Look for an inexpensive home – a small single family home, or perhaps a duplex or 4-unit building so you can rent out the other units. I suggest you use a “real estate agent” for your home.

  4. Join a local “real estate investment association.” You’ll get a lot of information about your local real estate market. Plus you’ll meet experienced real estate investors who can guide you about investing in the New Jersey area. You’ll also meet novice investors like yourself who you can relate to.

  5. Attach yourself to a mentor, someone who is currently investing in real estate, owns five or more properties, buys two or more properties per year and is willing to spend time with you.

  6. Now let’s get down to the nuts and bolts. To ease yourself into actual investing, I suggest you invest as follows:

    a. First Property – Buy a property to “wholesale”; that is, a property for which you can assign the contract to another investor for $2,000 to $6,000.

    b. Second Property – Buy a property to wholesale.

    c. Third Property – Buy a property to “retail”; that is, a property to fix up and sell.

    d. Fourth Property – Buy a property to “fix up and rent,” either as a straight rental or lease/option.

    e. Fifth and Succeeding Properties – You should be ready to make real estate investment decisions based on your own investment goals and your local real estate marketplace.

These suggestions are just that – only suggestions. I hope they give you some guidelines as you embark on your real estate investment career. Good luck and feel free to follow up with me if you desire.


James Strong

Where do you pick up the contract/forms for the loan that you will carry ?

Mine were created by my attorney.

Pretty Basic deed in trust registered at the county!

Plus some other basic forms!

Want a copy?

Not sure if it works where i live, thanks though.
Does R.E. attorney charge a retainer fee ?

Do you know any attorney that does not?? LOL

I always have one on a retainer!!

1st Scenario:

I was just approved for my 1st mortgage of $225K. I don’t want to invest it all on one property…but want to purchase at least 4 buy and holds (for starters) to increase positive cash flow.

How do I accomplish this?

What is the best way to generate additional $$$ for more purchases after an intial 1st time mortgage?

2nd Scenario:

I looked at a property in dire need of an extreme exterior makeover 3 blocks from the waterfront with 2 structures on 1 lot.

Can I negotiate cash at closing for renovations?

How much can I ask for?

How is this done?

How can I obtain additional funds to add a second floor to each structure and double monthly rental income?

How is this done when I’ll have no more cash to fix up the place if the entire 1st mortgage goes towards initial purchase?

If I have to put the entire purse into one property I might as well level the playing field and increase cash by renovating and adding on more livable space…especially because this property is so close to the waterfront (3 short blocks!) I know it will increase in value as the neighborhood begins to revitalize and the market goes up.

Please advise soon…I’ve scheduled a viewing to see the interior this coming Monday, 4/17/06. I need educated ‘neutral’ help without asking my RE Salesperson or the Mortgage Broker…as I’m thinking they might advise me to work it out in their favor without putting my investments goals as a priority.


I have been reading a lot, on these forums and also books form the library. There are hundreds of ways to invest in real estate!

I have my own plan which involves buying properties at 90% or more below their fair market value and using private lenders to get people with low credit scores or buyers in general that don’t want conventional financing into the houses for 100% FMV so the spread is 10% or more of FMV which is shared by the associates doing the deal. Once my advertising is in place and a team assembled I expect to be buying and selling several properties per month. I will also continue to birdog, find vacant properties for my REI associates because that is so easy to do!

One book that I read recently that had REI ideas that were intriguing is “How to make millions in real estate in three years starting with no cash” by Tyler G. Hicks. Got it from the library. Chapter 14 takes you month by month into what to do, what to buy, and build upon what you have done to a point where your net worth after 36 months is a multi-millionaire. He basically out lines how to buy & upgrade and use the added value and equity to buy another property which is rented and continue with that until you have 5 properties with a worth of $5M. With a MIF (money in fist) of $250K per year. But you’d be a landlord unless you sell for a lease to own. And I think the properties with a value of $1M or more he structures his figures on would have to be commercial or apartments. But it sounds doable and might be worth reading to get ideas about it.

Good Luck! Have fun!

$120k is more than you need to invest. You are in great position. I would concentrate on advertising vs putting large down payments.

Yeah, I figured it was way more than enough cause I hear about plenty of people that started out with 1% of that or less.

Some varying opinions in here, but they’re all good, none the less. I guess I should just choose a strategy that I feel is right for me and fits my plans and current situation. I’m open for suggestions, though. Can’t hurt to have more options. Thanks for your help so far, everyone.