[USER]

Is it crazy to think my husband and I can invest in real estate when our income isn’t that much? He makes about 55k per year and I’m a stay at home mom, I sell clothes online but it’s not enough to really count.

We own our home with no mortgage but we do need a bigger house. Im 25 he’s 29 and we live in TN, low cost of living.

We were lucky enough to buy our house before Covid and we paid it off. Our debt is 30k on a HELOC and 15k student loans.

We pay more than double the minimum payments. He is very hesitant and when I talk to friends and family about it they’re very negative.

I feel like we have a great opportunity since we don’t have to worry about rent/mortgage.

We could use our remaining balance on the HELOC as a down payment for an investment property.

[Molly]

I think you need to diversify by setting up a Roth IRA account and putting any available funds into it with goal to put in the max each year, invested in ETFs that include a broad array of stocks with low fees.

Many are recommended in other posts on this page.

Don’t get more real estate until that’s complete and debt paid down more…

[Grant]

“We paid our home off but we have $30,000 on our HELOC.” Now, how exactly does that work?

There is some missing context to this question before we can give a proper answer. Family size?

Income potential (future)? Condition of your current home? Budget? Etc…

[Gose]

If he is hesitant maybe see why that is? Nervous about the whole process? Learning more may help. Try a few books or even check out BiggerPockets podcast and websites.

Lots of good info that he can dive into to learn about it all.

It definitely takes two to start something like this up.

My husband and I kind of split the responsibility of it all, he’d do the handyman portion and I would handle the financials, lease agreement etc.

You could always check out the BRRR method too.

Just depends on how much work you want to put into it.

[Melissa]

I think it’s a good idea and could be more manageable with one person at home. Just try to find good tenants.

I bought a rental a few years ago and we’re not getting rich off it but we are currently in cruise control mode and have gained so much equity without doing much at all.

It’s a decent way to diversify.

[Neka]

You puchased before covid and paid it off. So you paid off 30 years of mortgage? Is that what you meant?

If you paid it off sooner please share how

[Valerie]

Run the numbers and see how profitable it is on a monthly basis. Great way to get rich slowly, but if you are not handy and have to hire out for repairs, and don’t like cleaning up after slobs when they move out, you may find it’s not worth it.

[Maribeth]

Not until both your debts are paid off. Getting rid of those is the best investment you can make, especially that Heloc.

Real estate is not a good buy right now in most places, ymmv. And rentals can be risky in a recession.

[Allison]

If you have a $30k Heloc you basically do have a mortgage. Let’s not mince words – you have debt/a loan against your primary residence. Regardless of what you call it.

Could you do it? Maybe. You’d have to put enough down that you’re positive cash flow, and plan for vacancies and upgrades.

You can go at it scared and slim or you could stack up enough cash to have a full 12 months of income saved up minimum, imo.

$55,000 covers you if you lose your one source of income, if your properties need expensive fixes in same year. Roof and a central air would deplete all of that.

That’s on top of your downpayment on the property.

I’m a comfortable real estate investor. I know many that like to live slim and scared. I don’t.

[Neal]

Pay off your debt before you take out any more loans. If you really want to invest in the future. Then after you paid off your debt, invest in Etfs like voo or Schd, vym,vnq.

This way you take very little risk and have no debt and earn divided income you could use to greese the wheels of your retirement.

Or even potentially retire early.

[Kelly]

You don’t own your home if you have a HELOC open. It’s a mortgage.

If you need to move up into a bigger home, turn the home you are leaving into a rental property.

Many investors start that way.

[Tristan]

I’d consider moving and house hacking a 2-4 unit. You could possibly rent out your current home for a year, move in to the investment property, then switch back to your current home after a year.

Or buy another and repeat

[Christian]

Think (and research) very critically of all these naysayers. If you have hustle and some basic skills, you can leverage against your house to buy cash flowing rentals, and/or fix and flip properties.

It’s not easy to do without surplus money but it can be done.

Start learning, always have a plan b, know your numbers, and be conservative. One good property can transform your life.

[Anthony]

The problem here is you are borrowing against your primary property with only one income. If you lose your job and have no tenant or slow paying tenant then you are at risk of losing both properties.

I’ve managed 5-6 at once but always kept ~50k just for the properties in cash in case bad things happen.

Plus, you are buying in the peak of this market in my opinion so more downside in coming years than up side.

I would hold off until you pay off loans and get funds together to buy a property.

I wouldn’t risk borrowing against the primary to get a rental.

[Author]

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