Property Investing: How to Find Capital in Your First Property

by Judi Cardello 02/23/2020

Photo by Jonathan Rolande via Pixabay

Dipping your toes in the real estate investing waters can feel intimidating--especially when it comes to making a large up-front investment. Although there are ways to get started in real estate with lower up-front costs (low- or no-down payment VA and FHA loans, for instance), it's smart to have some savings to cushion your first year. Here are a few ways to find the money for your first investment property--even if you're operating on a shoestring budget. 

1. Make Some Sacrifices 

Think investing should be sacrifice-free? It's a thought popular with the Instagram philosophers of today--you know, just secure the right mindset and the money will follow. Unfortunately, real life--at least, the real estate investing life--doesn't work that way, especially at first. Cut back your discretionary spending and earmark it to begin your investment portfolio. Your side hustle might be the springboard you need to save up a down payment for your first property--if you're willing to do the work. Tighten your belt until you close on your first property, and you'll reap the rewards in the long-term. 

2. House Hack Your Existing Property 

Already own your home? Consider renting out a room, or setting it up as an AirBnB. If you have a partially-finished basement or mother-in-law suite, you could even renovate to create a true ADU (additional dwelling unit). Et voila! You're off and running as a real estate investor, improving your monthly cash flow scenario in a way that allows you to save for a larger investment down the road. 

3. Know Where Your Money is Going 

If you don't already have a budget, get one. No matter what system you use, you need a system--whether it's Dave Ramsey's envelope system, an online program like YNAB or Minted, or an Excel spreadsheet of your own design. It's also smart to talk to a financial advisor and/or accountant as you set goals and adjust your budget to fit your needs. No matter how much capital you are (or aren't) working with right now, an advisor can help make sure you're taking big strides in the right direction. 

You'll find that if you're dedicated to your goals, it's incredible how quickly you can stack up enough savings for a down payment on your first property. Impatient to get started? While you're saving, learn everything you can about the market in your area. The time you spend saving and educating yourself will change your life. 

About the Author
Author

Judi Cardello

A Connecticut native and self-titled household CEO, Judi Cardello is passionate about connecting families with their forever home. She prides herself on being a thoughtful partner and a good listener while delivering results for her clients. Before joining the world of real estate, Judi helped develop, manage and market Cardello Architects with her husband, Robert A. Cardello AIA. Cardello Architects is an established, high-end residential and commercial firm. Located in South Norwalk, CT, RAC provides a full range of architectural services nation-wide. Judi, her husband, and two children have lived in Fairfield for over 19 years and are active members of their neighborhood and school communities. Knowledgeable about public and private schools as well as area amenities, programs, and services, working with Judi means working with a member of the community. She brings her insight, marketing expertise, determination and ambition to Remax Heritage and looks forward to contributing to the success of the organization. Judi has a Bachelors Degree in Marketing and 10 years of experience in marketing and product development with a concentration in international business.