Can You Get Started In Real Estate With $50,000?
A few weeks ago I received an email from a gentleman by the name of John. He seems to be a bright guy around my age and was looking for some advice on how to invest in real estate with $50,000. He wanted to get involved with flipping houses and already had one successful flip with a net gain of $55,000.
I love getting these sort of emails and thought I’d share our conversation with you since he’s not the only one looking to do this. Here’s his email to me:
Hi David, I came across your blog and have found that its fresh, open and direct approach really set it apart from the glut of information out there. So thanks, and I look forward to exploring the site more fully! I’m wondering if you offer any one-on-one coaching or personalized tips for the beginner (in this case, one with a little bit of money to start with).
A little about myself: I am a 33-year old classically-trained professional musician who recently completed a Master’s degree at the Yale School of Music in Connecticut. I have been making a decent living for the past 8 years as a full-time musician, and have really enjoyed some wonderful experiences performing in other countries, etc. However, now I am thinking about settling down with my fiancé, and would like to explore opportunities in real estate more fully.
I recently sold my first property, a condo that I bought when I began my studies at Yale in 2004. After the expense of some cosmetic upgrades and broker’s fees, etc., I will net about $55,000 at the closing. This really opened my eyes to the power of investing, especially when for the past 3 years I have been living in a beautiful, spacious condo personalized to my tastes, while my peers have been paying about the same amount to live in small apartments in cramped buildings.
My basic question for you is this: do you think it’s possible for someone to get started in real estate investing with $50,000, and if so, what are some of the approaches that one might take? I looked into becoming a realtor, but I don’t think that that is the way for me; I’m more interested in investing and rehabbing properties. I have a good eye for design, etc., and am able to do cosmetic repairs myself, though I would rely on a contractor for serious remodeling like roofing, etc. I am relocating from Connecticut to the West Coast due to my girlfriend’s job situation, and I hope to devote as much time as possible to real-estate investing, while working a separate part-time job if neccesary.
I hope that you can offer me some insight, and again, I appreciate all that you do to share your knowledge with people like me. Thanks!
Here’s my response to John’s email:
Thanks for the complements and I appreciate your email. You’ve got off to a great start thus far! I actually don’t provide any “official” one-on-one coaching but I’m happy to give you some advice. When I first started it was all self-taught either by reading books, online information, or just trial by fire. I never really had someone to take me under their wing which is usually the best way to go.
Based on the situation you explained below, it’s definitely possible to get started in real estate with only $50,000. That’s more than most people have to begin with! So the big question is where to start. Flipping properties is a very lucrative business especially if you enjoy fixing up places and looking for deals. I’ve always wanted to do this myself but living in CA makes it tough since the market has softened and it’s important to be driving distance to these types of projects. If you feel the real estate market in your area is in better shape, I’d go for it. I’d also recommend a couple great resources to get your started. The first is a book called “Find It, Fix It, Flip It!” (aff) by Michael Corbett and gives you a great step by step approach to flipping properties. The second is checking out economic reports by a fellow named Ingo Winzer. He saves you the hassle of trying to do your own real estate research by providing amazing reports. Each one costs $99 per city but it’s well worth it. http://localmarketmonitor.com/
Those tips should get you started so after you get going, let me know if you have any other questions along the way and I’ll do my best to answer them!
Now there are many different responses and additional details I could have provided him but each real estate investor needs to do some research and reading themselves. I find that books and just reading blogs or websites is the best way to increase your knowledge before purchasing your first investment property.
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