Have you ever wanted to invest in real estate but felt like you couldn't because you didn't have enough money? Well here are our tips on how you can get started real estate investing even on minimum wage!
How to Start Real Estate Investing on Minimum Wage!?
Welcome to the video. Have you ever wanted to invest in real estate but felt like you couldn't because you didn't have enough money? If you LOVE HGTV like we do, you may be thinking that investing in real estate is out of reach for your income bracket. We are here to tell you that it ISN'T! You can start real estate investing with whatever income you have! It's not about how much you make it's about how much you save. YouTube Link: https://youtu.be/yFMyoAzeoj0
How to Start Real Estate Investing on Minimum Wage!?
DISCLAIMER:
- Everyone has different circumstances
- Min. Wage Differs
- Point of video is to show how you can begin real estate investing on very little income.
- It’s not about how much you make but about how much you are able to save!
CONTENT:
- Minimum Wage differs
- For video using $10hr
- Average work week of 40+ hours
- Average monthly take home pay of $1500
- Housing Costs Differ (location, size, condition)
- Average for video 100k for a condo 1bed 1bath
- Typical “starter place” for your area
- Start early on your search
- Get a real estate agent (it’s free)
- Talk to a mortgage broker specifically one who works with investors/first time
home buyers etc...
- Average monthly housing cost will be around 1K including all taxes, insurance, pmi, hoa
etc... (this is conservative and relatively high)
Step 1:
SAVE/SAVE/SAVE!!!!!
- Cut back wherever possible
- Bike, walk, ride public transportation
- Live at home or with multiple roommates
- Don’t need the newest best iphone
- Stop eating out!
- Live frugally for 1 year!
- Save roughly 500$ a month for 12 months
- That will be 6K dollars!
Step 2:
Look at Mortgage Options by taking to a mortgage broker
- FHA vs. Conventional
- CHFA or Down Payment Assistance for First Time Home Buyers
- Should be able to get a downpayment of roughly 3.5% or free just 1K with down
payment assistance!
- These are all owner-occupy loans (Very important) you MUST owner occupy to
benefit from these low/no down payment options.
- This means you will need roughly 6k (3.5% plus closing) or as low as 1K to start
real estate investing!
- Understand how long you will need to live there usually 1-2 years
Step 3:
Find a RE Agent!
- They are free and work on a commission from the seller!
- Find a property that works for you!
- LOCATION LOCATION LOCATION
- Worst place in the best area
- NOT UPDATED (value add will be immediate and significant equity)
- If applies find a property that allows FHA
- Find a property that you will be able to rent out and it will cover your
monthly expenses!
- Better to find a property where you can maybe even make some
immediate cash flow once rented out.
- To do this use Zillow or CraigsList and look for rentals of same size/area and find
out what they are renting out for!
- IF YOU CAN’T COVER EXPENSES WITH RENTAL INCOME DON’T
BUY IT!
- Process can often take an entire year to find the perfect property so start
early in your saving process!
Step 4:
Close on the property!
- Let say you have roughly 2K left over after paying for down payment and or
closing costs!
- Spend the next year that you are required to live there fixing it up! Slowly but
surely.
Step 5:
Renovate the property!
- Check out our separate video for tips on renovating your first rental property!
Step 6:
RENT IT OUT!!!
- Find good tenants, post on zillow, CL, Hot Pads etc...
- Make sure you can cover expenses with rent payments and after renovations should be able to net a little cashflow.
- Depending on circumstances consider Refinancing.
- Because of instant equity due to renovations you might be able to use money
from refinance to get another property!
Step 7:
REPEAT
- Keep saving same amount 6K a year!
- With possible 200$ cashflow from first rental property you should now have roughly 8500$
- Consider buying same priced place or graduating to something slightly bigger
- No longer eligible for FHA or CHFA but will be able to get 3-5% conventional
loans (with owner-occupy)!
- Live in property for year or two while renovating and repeat!
Step 8:
MAKE MONEY!!!!
- You should be able to raise rents every year and therefore your cashflow will
increase almost every single year!
- After 30 years you will be sitting on hundreds of thousands of dollars from one
property and you will have made considerable cashflow every single month to
increase income or save to invest in more properties!
Join Us Next Week
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Carla & Conner are the mother-son real estate and design duo. They are coming clean about all of the dirty secrets airbnb hosts don't want you to know. From real estate investing, finance, business to interior design and budget friendly hacks! Carla & Conner will upload new exciting videos every week.