Real Estate Rookie Cash Flow or Equity: Which One Should Beginners Invest for? (Rookie Reply)
Oct 11, 2024
In this engaging discussion, Noah Bacon, a savvy real estate investor and YouTuber known for his "How I Started" series, dives into the classic debate of cash flow versus equity investing. He shares insights on whether beginners should aim for immediate profits or focus on long-term growth. Noah also emphasizes the importance of having sufficient capital for a first rental property and offers advice on transitioning from house hacking. With practical tips on property management and leveraging partnerships, his expertise is invaluable for new investors!
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Transition to Equity-Focused Approach
- As you gain experience, transition to an equity-focused approach.
- Use the "stack method": Buy cash-flowing properties, then 1031 exchange into equity-focused investments.
Prioritize Cash Flow as a Rookie
- Prioritize cash flow as a rookie real estate investor.
- Cash flow offers a safety net for inexperience and potential mistakes in deal analysis and due diligence.
Noah Bacon's Down Payment Strategy
- Noah Bacon put 10% down on a $260,000 property, costing about $35,000 cash to close.
- He had $50,000 saved before investing, exceeding the typical 3-5% down payment.