It is not uncommon for us to work with investors who have saved somewhere along the lines of $25,000 and want to know the best way to invest this money. For starters, there isn’t a right or wrong answer to this question. But as a point of discussion, I’ll put myself in the shoes of a brand new investor and explore the thought process behind how I would invest that money.
There are a number of different options presented to a brand new real estate investor when it comes to investing that first big chunk of change. Many people decide to invest the money in some form of coaching in hopes of learning as much as possible before actually buying real estate. Unfortunately, most people end up spending way too much money on expensive coaching that doesn’t equate with the amount of education they received in return. Don’t get me wrong, I believe there is a time and place for appropriate coaching, but sadly, too many eager investors get duped into super expensive coaching programs that simply aren’t worth the money. Truthfully, I think new investors can learn almost everything they need to get started right here on BiggerPockets for free – so my advice is to pass on the up front coaching.
What, Where and How
Once you’ve decided the money will get spent on actual real estate rather than education, it’s a matter of narrowing down what you’re going to buy, where you’re going to buy, and how you’re going to buy it. With $25,000 to invest, it’s likely that you’d be in the market for residential real estate as it would be tricky to get into a commercial deal without a little more money. You could consider putting the money into a real estate fund of some sort, but …read more