What To Do With $10K? Advice Appreciated
I have $10K saved up. I'm looking for ideas on how/where to invest it. In California, I know there's not much I can do in terms of investing in real estate, so I am beginning to think investing out of state might be the best idea, possibly going half with another investor on a deal. I have seen homes with listing prices of $7-$30K online through various sites, and that made me think more serious about out of state investing.
Any ideas, thoughts, advice, etc. would help.
Thank you in advance.
Anyone? Everyone should have at least 2 cents worth
Greetings aceinquiries,
I am a first time investor myself. I wondered also if I should use the money I had for California or another state. As you probably know, California prices are high and 10K wont do much. I am in escrow right now on my first investment property in Phoenix, AZ. The market is really hot in Phoenix right now. I bought a brand new 4bdrm 2ba house for $200K with $15K down. You can definetely get something in AZ with $10K down. Just wanted to put in my 2 cents. Good Luck!!
Now that's the kind of "2 cents" I'm talking about! I will definately look into the AZ market.
Did you need to get approved for a loan, or did you work out a lease option or fsbo? Is the interest a lot less because you invested in AZ?
$10K could be easily eaten up in closing costs in purchasing a property. With $10K and going solo, you are looking at purchasing power of $50-$70K. With a partner, you could increase your purchase power. You should be looking at converting that 10K to 20K in a reasonable period of time.
3 years ago, I had 7K and was single. I bought myself a condo for 88K. and after a year and half, I sold it and made myself a decent 30K. If you are a first time homeowner, then bid on a good HUD home with low downpayment costs.
Never, Never use this 10K that you have on a program that will teach you how to invest. Maybe you could buy a few books, but don't spent thousands of dollars on Guru Seminars etc. Your money is well spent in actually investing it.
I would use this 10K to buy a HUD home that needs work, get a 203K loan fully financed, fix up the place and then sell it for a profit. Easier said than done, but do your homework. Partner with somebody who has done it before. Join your local REI club and you will find a way to invest this money.
tzachari - Thank you for the great idea. Maybe I should have mentioned this before, but I am going through a bankruptcy and it's too late to turn back on it. Does this mean I am doomed and will not be able to invest?
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On 2005-01-07 22:01, JRendell wrote:
Greetings aceinquiries,
I am a first time investor myself. I wondered also if I should use the money I had for California or another state. As you probably know, California prices are high and 10K wont do much. I am in escrow right now on my first investment property in Phoenix, AZ. The market is really hot in Phoenix right now. I bought a brand new 4bdrm 2ba house for $200K with $15K down. You can definetely get something in AZ with $10K down. Just wanted to put in my 2 cents. Good Luck!!
Interesting I had just become interested in buying my first investment property in Phoenix - but my main concern is the viability and future of the market. Do you have any references I could reserch as to the strength and future of that market?
Nothing that comes from an investors standpoint. I have a friend who is trying to sell a house somewhere in Texas but they say it is very hard to sell right now. But they are not investors. I will look into it further next month. Too much on my plate with prior obligations this month. I will let you know, or post here about Phoenix Property Investing. I have a list of Phoenix investers and I will contact them and see if they all say the same thing and what is different in their opinions.
Hi. I am a newbie-take this into considration.....as far as going out of state, in my area even moving over one street can mean a difference of 20K in property value for same house. You need to know your area. As far as buying a 20-30 k house in a 60-70k neighborhood, the problem will not be to find a buyer for that 20 k house you fixed up and is now worth 60k; you will find people falling all over themselves wanting the house...the problem is finding a buyer who can aquire financing and actually buy your house. Unless you want to hold the mortgage for a while so they can build up their credit, it might be tough getting rid of
Why not use that 10k to start your marketing campaign? Get those deals that require nothing, (or near nothing) down and wholesale? 10k would be great for getting out the word and maybe use some 1 time billboards and perhaps a call answering service that will take the calls, and you get the leads via email or fax.
I wish I had 10k to do some serious marketing. Instead of potentially risking that hard earned 10k by plunkering it down into one deal, why not just get the word out that "We Buy Homes!"
Great idea on marketing. I am working with a few investors on several marketing campaigns already. I could always look into more marketing.
As for having trouble selling a house once I buy it for out of state deals, I was thinking I could whoelsale those deals as well and offering owner financing would be a possibility as well, as long as their monthly payments are more than what my monthly payments are for that particular property. Either way, I could only hope to find myself in such a great "win-win" situation, in the near future.
Thank you both for the advice.
I have a friend that sells lots (land) for building homes on and he says to "never" use your own money, but use the bank's.
Even if it's at a high interest rate, in 6-9 months you could flip the house and sell it and still make a profit.
* I'm not sure about that, but that's just what he does*
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On 2005-01-07 22:39, aceinquiries wrote:
Now that's the kind of "2 cents" I'm talking about! I will definately look into the AZ market.
Did you need to get approved for a loan, or did you work out a lease option or fsbo? Is the interest a lot less because you invested in AZ?
Greetings,
Sorry about the delay. I have been very busy. I did have to get approved for a loan. Almost had 100% financing which it would have only cost me the closing cost of $5500. My debt ratio was 46 and they wanted 45 or below. That sucks. So I had to take $10k of equity in my primary and put 5% down. The interest is not alot less. It is an 80/20 loan. The 80% is at 6.25 and the 20% is at 9.75%. That does not matter though since someone will be paying the mortgage. Hope this helps!!
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On 2005-01-08 14:25, alect wrote:
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On 2005-01-07 22:01, JRendell wrote:
Greetings aceinquiries,
I am a first time investor myself. I wondered also if I should use the money I had for California or another state. As you probably know, California prices are high and 10K wont do much. I am in escrow right now on my first investment property in Phoenix, AZ. The market is really hot in Phoenix right now. I bought a brand new 4bdrm 2ba house for $200K with $15K down. You can definetely get something in AZ with $10K down. Just wanted to put in my 2 cents. Good Luck!!
Interesting I had just become interested in buying my first investment property in Phoenix - but my main concern is the viability and future of the market. Do you have any references I could reserch as to the strength and future of that market?
The viability and future is something you can study, but also take the risk. I went on alot of real estate websites, newpapers, investment articles, etc which stated the market conditions. I just found this article tonight in regards to Goodyear.
http://www.azcentral.com/arizonarepublic/northphoenix/articles/0114wvhousing0114Z3.html
I have read several books, talk to realtors, tax advisor, and went to AZ. I new that I had quite a bit of knowledge, but would not really know what it was like until I got out there and did. I just said, "I have to try it". The market is extremely hot in Arizona. House last 2hrs to 3days. Could not pass it up without trying it. Hope this helps. Good Luck!!
Thank you to both of you again for your wise advice.
I have heard TX is great to invest it as well and will probably begin to target somewhere there. I will let you know what I come up with.
I have heard TX is doing great for realestate also. Let us know what you find. Send me a message if you can. I would love to hear what you find out. I really believe in Robert Kiyosaki's point, "Learn a little about alot".
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On 2005-01-15 16:14, aceinquiries wrote:
Thank you to both of you again for your wise advice.
I have heard TX is great to invest it as well and will probably begin to target somewhere there. I will let you know what I come up with.
aceinquiries & jrendell: send me a message so we can share notes on TX. I'm also looking there. I'm in CA.
Buy In Buffalo, NY. But realisticly you shold consider other partners. Closing costs alone can kill you.
Form an LLC with someone in a town which is cheaper perhaps who also has cash.
Have aplan for maintenacne, repairs, and renting.
You might be better off in an LLC devoted to new developments vs actually owning and opertaing yourself.
I'm not going to give you two cents, I'll give you the whole dollar. Leave California. Yes.
I lived there for two years, and most of the Cali Natives are scared to leave. If you want to make money in REI you could make a ton of money in other places. Cali isn't going anywhere. To make money you must be flexible. You have to get in the mix. I tried to do the out of state investing and it's not as easy or rewarding as you may think. If you wish to stay in Cali, 10k would be great for stocks and mutual funds. I hope you do make good with it though. You are in the right place on this forum.
[ Edited by dakirkley on Date 01/24/2005 ]