Hey New to the Game, let’s take a look at your circumstance.
So you have $30,000 in cash, which is an excellent asset, and you currently live in a 2 bedroom and 1 bathroom home with your wife. You are eager to begin investing in Real Estate under the Niche of “Wholesaler” or a person who buys properties at a bargain and sells them higher to obtain a profit.
Your question is, what would I do in this situation? You say you have the option of adding onto your current home or use the $30,000 to purchase your first home and flip it. Okay, let’s start breaking this down some.
If your goal is to be a Wholesaler and obtain properties at a bargain and fix or update them and sell them quickly, what I tell my clients is to become an EXPERT in their field. Become an EXPERT in your niche. Seeing that you want to do wholesales, I need you to study the fundamentals, principles, and procedures involved with being an excellent wholesaler.
I want you to become a professional wholesaler, by obtaining the wisdom needed to become one. Now, the next thing you do is begin building your needed team or as some call it your “A” team. This includes your money source for capital, and I want to tell you something, your $30,000 is an asset. You learn how to obtain properties at a bargain (can be a foreclosure, property needing repair, seller just being nice or needing to get rid of it) and learn how to structure the deal so that your HARD MONEY LOAN will fund the entire deal. That includes all lender points, fees, and closing costs. This is what is referred to as No Money Down Deals, at least one of the ways to get a NMD Deal. And a HARD MONEY LOAN or a private loan is just a loan from a private lending company where the owner has pooled together private individuals and companies who are willing to invest their money in Real Estate Deals short term, to obtain a 14-18% profit and return on their cash.
Take your $30,000 and, not to sound like a financial planner, but I would put that in a side fund that’s conservative and allow that $30,000 to earn a 7-9% rate of return. If you don’t need it, then I would put it away safely and earn that rate. While CD’s aren’t advised much by many investors, I know of banks where you can get a CD with 8% on it. I mean, a mutual fund does around 10%, and here you can get a CD that’s SAFE at 8%. I don’t think that’s a bad deal at all.
Let chat a bit here on this forum, tell me more New to the Game, what are your goals in Real Estate? Where do you see yourself in 1 year, 5 years, 10 years? What niche and area of Real Estate are you most interested in, and are you willing to study and become an expert in that area?
- I have the option of building an additional 1 bed/1 bath to my house and increase the square footage/value.
or
- Use the $30k and purchase our first investment home and flip it.