Is it possible in today’s economy for a single mother to become a real estate investor? These are middle class women who have had their world turned upside down due to the breakup/divorce.

Ten years ago, when houses were selling for $25k and needed $5k in rehab, the answer was an easy yes (remember $10/hour labor and the 50 month payback!). Today, the same house is now selling for $175k and needs $25k in rehab and rents for $1500/month.

Every few months, a single mother will come to our REI meeting and say they understand the value of real estate and they would like to become a real estate investor.

Some of the single mothers have several toddlers at home, some single mothers have young teenagers. The ex husband is usually not around and provides very little financial support.

The mothers are struggling financially, they still have money from the divorce settlement (maybe $50k), and most are college educated. Most of the mothers dropped out of the work force to stay home and raise the kids.

Can a single mother still become a real estate investor?

Anyone can become an investor, but when you are single - it is a great harder to get ahead.

It's not all about the money, cost and repairs, it's about the knowledge and skills on acquires along the way. Like anything, if you are smart, think outside the box, you can succeed in any wall thought out plan of making money.

In real estate, there was once upon a time you could buy almost anything, hold it and in time you have appreciation.

I'll tell this quick story, back some time ago, we here in California (Los Angeles) had the Mulholland fires, burning hundreds of homes to the ground. I and a couple went to check out the offerings. The insurance company were selling now vacant lots, lot with some still standing structures and some with only the frame of houses left.

So my couple friends purchased a cleared lot for around $28,000. Land can not be depreciated so the $20,000 they borrowed to by the lot they could not write off the land, with no structure, in 10 years they put of of pocket around $40,000, and still had a mortgage and taxes to pay.

I purchased a lot with a half burned home for $32,000. I using my wits got to deprecate the property, take a causally loss and had it paid off in 10 years.

Today my friends lot that cost them $50,000 in payments is worth around $350,000.

How bout being a responsible / primary homeowner first.

If they have limited funds (usually the situation), tell them to start by assigning the contract to another investor. First find a messed up place selling for a good discount but full of trash and overgrown yard. Make an offer that is accepted with a s long a closing time as possible, preferably 60 days or more, with permission to clean the place up at their own expense prior to closing. Provide a clause that says if they don't close, they forfeit any money they put into the cleanup. Low earnest money.

When the paperwork is done, they get busy and clean up the place, mow and trim the yard, get rid of all trash and maybe paint just the front wall if it needs it. Usually takes 2 or 3 days. Then take new pictures and shop it around to other investors for a better price, maybe 10-15K more. Take an offer and assign the contract. When it closes, they get the assignment fee (maybe 10K or so).

Do this several times. Get to know investors who will buy the cleaned out places.

Yes, a single mom can become a successful real estate investor.

So can a single dad.

So can a college student.

So can a trade school student.

So can an 80-year-old, quadriplegic retiree.

Anyone with drive, focus, persistence, and motivation can accomplish their goals. You do have to start out with what you've got.

Everyone starts out with certain advantages and disadvantages. Can't do anything about that, so a person has to decide "Am I going to overcome these or am I going to sit on the couch and binge streaming service 'content' waiting for the Govt to fix my life?"

It would probably be best for the single mom to find herself a mentor to inspire and encourage her, but ultimately she has to be the one with the motivation to make it happen. Nothing causes mentors to run away like a "woe is me" story. We don't take those from our tenants, and they're PAYING us.... well, maybe they WERE paying us. *wink

Bottom line: insert whatever category of woe into that topic... the answer is the same. Yes, (category of person) can be a successful real estate investor. Step 1, stop seeing oneself primarily as a downtrodden category and start living the dream in thoughts, words, and actions. The money will follow.

What you're really asking is, can a person with very limited time and $50K successfully invest in RE?

I would say it depends a lot on where they live. With that 50K as a 20% down payment, you can spend $250K. Around here, that will buy two decent 3BR homes that don't need much work that can be rented out for $1200/month each. That's a minimal-time-required scenario suitable for a single mom.

My rough calculation puts that as cash flowing a couple hundred a month, with a 30-year payoff. Not really worth the time and effort.

BUT...if that same person used the $50K to add an ADU to their home, or convert the basement into a studio apartment, and turn it into a short-term rental, it could be a GREAT investment. And she could clean the STR while the kids were napping or in school.

Practical advice to single mom who have little money or knowledge on what to do with real estate investing.

1) Always make sure bills get paid on time. No excuses. Eat Ramen for a month if needed. If a bill can't be paid, amputate whatever it is that's causing the bill to be too much. Find a smaller, cheaper place to live. Get a less expensive car. Move closer to work so a car isn't needed. Etc. This will get the nasties off the credit score, in case she wants to go the traditional bank route of borrowing money and/or find investor partners.

2) Consider private money if #1 is a no-go (i.e. tons of medical bills / student loans). Private money invests in the DEAL not the PERSON so much, so the credit report becomes irrelevant.

3) Find the real estate deal that no one else sees or wants and get it. First deal will be hard: they always are. It might be a run down 4-plex that can be cheaply renovated and rented out to college kids or used as a rooming house, and single mom and kid(s) live in one unit while other tenants pay the bills and the money partner's cut. The mentor can help guide in this process. The "house hack" is still popular among newbie investors.

4) Bird-dog for successful investors for a finder's fee. This costs nothing but time and a little gas money... or get a bicycle and go knocking doors in neighborhoods with houses that look like they need a good rehab. Prep and mail "yellow legal pad" letters for "I Buy Houses" investors.

5) Offer to act as a quasi property manager to a successful investor. Take applicant and tenant phone calls and emails using only the investor's pre-written and legal scripts to avoid any legal issues, organize showings, do semi-annual maintenance inspections, change furnace filters, etc. Run errands. Drop papers off at the courthouse.

Just a few thoughts to get anyone started that cost little to no money and will long-term serve the person who does them well in their own ventures when the time is right to dive in.

It's not about your marital status, but it's about being part of a team that is able to work together to succeed where one person would fail. Each individual has a limited amount of resources (money, time, experience, knowledge). But when you have multiple people's resources pooling together, you make up for each individual's lack of a certain thing because the group is stronger than its parts.

With a healthy marriage, it's easy, because you're already used to pooling money, sacrificing time, pitching in so each person does the things they're strong at, and deferring to someone else's superior experience/knowledge when it's a problem beyond your own personal realm. You're already a functional team in other aspects of your life, and by remaining a marital team in real estate, it keeps the profits at-home as well. You're not splitting or arguing or having to coordinate with outsiders. Any necessary outsiders are hired for a specific reason--- cut the trees, mow the grass, wire the electricity, install the HVAC, run the plumbing, whatever-- and they go away after they've been paid to accomplish a specific task, rather than being involved in all-the-risk and all-the-reward.

However, not every married couple is able to function as a real estate team. There are plenty of people on this forum who have/have had a supportive-but-inactive spouse, or even an unsupportive and somewhat-hostile spouse. Perhaps their real estate acquisition happened in the past, or perhaps their path was easier because they acquired it via family or friends without the support of the current spouse, but there are others who have maintained their biz despite zero direct spousal support. But even then, the nonsupportive spouse has helped indirectly, especially when it's a double-income home.

We had friends we considered going into business with back in DFW. There were four couples. Each of us brought something to the table. Law experience, money, sweat equity/construction experience. However, even though we had been friends for 10-15 years, we didn't get past the first discussion because we couldn't agree on whether to pursue commercial or residential investments. (Friend A ran a family-owned plumbing supply company which made its most reliable money from renting his warehouse from himself for 50 years straight; I was concerned about passing by vacant commercial property that stayed vacant for 5+ years and preferred something with a higher/more predictable demand.) There was no one with veto power to say "this is how it's going to be" and the rest of us accept it, even if it conflicts with our personal opinion.

For us, as a married couple, we didn't get into RE until we had done everything else significantly financial that we planned to do-- we had paid off student loans, paid off our house, started our family, etc. We had stability, so we were able to risk putting large amounts of our assets into a vehicle that was under someone else's control. We could control who lived there, but we couldn't micromanage the way they live. People can look good on paper, but especially for inexperienced beginners, the unexpected can slide through.

Our first tenant was a waitress who had no criminal history--- and she was picked up on outstanding warrants two weeks after moving in. Our screening didn't show that she had live warrants. Then our house sat empty for half of November through Valentine's Day, until it was picked up by a family who needed a small, cheap, neutral space as a retreat for their autistic child who was going through a stressful period with his bio dad. They lasted a few months-- and then the mom was diagnosed with cancer, and they had to cut back on their surplus spending to deal with that. We were able to roll with the setbacks, because we weren't depending on that income--- we were already stable, and the income was there to feed the biz, not feed us.

So-- it's not that being a single mom makes it impossible to succeed, it's that being a single mom means that your priorities are elsewhere, your energy is elsewhere, your finances are elsewhere, and all your resources are elsewhere, to the point that it's unlikely to have enough extra time/money/energy/interest to start a risky new biz, run it, get it profitable, and direct that profit to yourself. And it's also less likely that you have spare resources to pool with a team that you only have a fractional interest in--- if there are 6 partners pooling resources, and $300/month profit distributed between those 6 people, it's not easy to justify all-the-effort for $50/month.

Today, I'm investigating a mouse that chewed a wire on the stove; I'm cleaning up water damage from a house that had a water leak (the flex line had rusted and broken; they were installed fresh 10 years ago; one of the pair was perfect and the other was rusty; the tenants are hunters who only use it on weekends); I'm replacing a pane of glass at a turnover; I'm screening applications for a vacancy; I'm running electrical, plumbing, and HVAC updates on a new renovation; I had a near-miss on an attic fire (HVAC guy discarded a cigarette in my insulation, then left for lunch and never came back; it was found by my plumbers and handymen; I am so fortunate that two of the four had firefighting experience and their fast-thinking saved it from going out of control; but now I'm paranoid to leave them unsupervised); I'm working on the last bits of getting the rooming house on its feet; and we're clearing out Old Storage House into New Storage House because we're going to renovate Old Storage House into an actual residence in 2025.

And that's my half-day, because I need to drive five hours to go help some friends for the weekend.

I used to do that kind of stuff when the kids were small-- I'd bring them with me. It got easier when they were in school; I just had to get home in time to pick them up. Now they're old enough to walk home. But not everyone lives within walking distance of school, either...

Those are the difficulties and the reality of juggling any kind of biz with family. It's doable, but a little ADD energy helps as well. :P

If someone wants to profit off the income of RE, I'd recommend they start acquiring it (a) while they still have a W2 job for as long as they intend to borrow, and (b) start acquiring it about 10-20 years before they actually plan to draw on the income. That's one of the reasons why starting off with a duplex or a triplex and self-occupying a single unit is such a popular strategy, because it allows you to take on loans under better terms than if you were planning on acquiring a straight-out investment property, and it keeps you from being saddled with the kind of rules and regulations that you get into with quads and above.

Another time-honored strategy is to rent out rooms in your personal space, but once you have kids in the mix, it becomes much more difficult. Partly because kid safety in a mixed/non-family living space is much less reliable, and partly because kids aren't the most considerate roommates, and so the "best" tenants are less likely to want to share space with someone else's kids they have no authority over. But still, people AirBnB out parts of their house, even with kids.

RB--I totally agree.

Thanks to everyone who posted.

I showed your comments to the divorced mom.

She said she appreciated everyone who took the time to reply.