How I’m Saving for My First Investment Property

I’ve been fascinated by real estate since 2017. That’s when I first dove into the world of personal finance, investing, and the FIRE (Financial Independence, Retire Early) movement, largely inspired by the Mr. Money Mustache blog. Over the years, I’ve spent countless hours learning through reading, taking classes, and even passing the Ohio Realtor exam. Now, I’m working towards my real estate investment and analysis certificate from UCLA Extension.

Investing in real estate requires a certain amount of capital to get started. This is how I am saving for my first investment property.

1. Setting a Clear Financial Goal

Setting a clear financial goal can be tricky, because everyone's circumstances are different—after all, it’s called personal finance for a reason. However, having a specific, well-researched number in mind is critical for success.

In my case, I’ve set a goal of saving $60,000. I determined this number based on the type of property I want to buy, the down payment needed, estimated renovation costs (with some extra for contingencies), and an emergency fund.

For example, Cleveland—where I’m targeting my first investment property—is a lower cost of living city compared to my current home in Los Angeles. This means properties are more affordable, but I still need to be strategic. Typically, single-family homes require at least 15% down for investment properties through traditional lenders, while multifamily properties with 2-4 units often require 25% down. My $60k number is tailored to my personal strategy, but this figure might vary widely depending on where you’re investing and the type of property you’re targeting.

2. Multiple Income Streams

To reach my goal, I’ve diversified my income streams. In addition to my full-time job as a software engineer at Rebuild Manufacturing, I work a second job as a church organist at Holy Trinity Episcopal Church in Covina, CA.

This dual-income approach has been a huge advantage. I’ve developed a habit of depositing 100% of my income from my second job directly into savings. By never seeing this money in my checking account, I mentally set it aside for real estate, treating it as non-negotiable. On top of that, I aim to save as much as I can from my full-time job, though having a second income accelerates my progress significantly.

If you're working toward a similar goal, consider diversifying your income streams, even if it's through part-time work, side projects, or freelancing. Having that extra income stream dedicated solely to savings can be a game-changer.

3. Strategic Budgeting and Savings Habits

You can’t out-earn bad budgeting habits, which is why I’ve become laser-focused on being as efficient as possible with my savings. Here’s how I do it:

Utilizing High-Yield Savings Accounts (HYSA)

Traditional savings accounts don’t offer much return on holding your money. That’s why I’ve opted to save in a high-yield savings account (HYSA) that currently offers over 4% interest per year. This might not sound like much, but it adds up. On a good month, I make at least $100 in interest, which helps compound my savings toward my goal. It’s free money, so why not take advantage of it?

Maximizing Tax-Advantaged Accounts

Even though I’m prioritizing real estate, I don’t neglect my long-term financial future. I fully fund my Roth IRA every year, and I also contribute to my 401(k) to get the maximum employer match. It’s important to think about retirement while also saving for short-term goals like real estate.

Cashback Credit Cards

I’m a big fan of using credit cards strategically. I use a 2% cashback card for almost every purchase, which is essentially another small income stream. The trick, though, is that I never carry a balance. I pay it off in full every week, treating it like cash. This keeps my credit utilization low (boosting my credit score) and earns me rewards, all without the downside of interest payments.

Maintaining an Emergency Fund

An emergency fund is crucial when you’re trying to avoid credit card debt. Mine is safely stored in my HYSA, so if something unexpected happens, like a medical expense or car repair, I won’t need to go into debt. Having this safety net allows me to continue saving without worrying about financial setbacks.

Sinking Funds for Large, Infrequent Expenses

A key insight I’ve gained from using YNAB (You Need A Budget) is that large, irregular expenses can be budgeted for monthly. For instance, my car insurance is paid every six months, so instead of scrambling to cover that lump sum, I save $500 a month. That way, when the bill comes, the money is already there. I use the same approach for other large, infrequent expenses like car repairs, travel, or HOA special assessments. This ensures my savings goals stay intact, and I don’t need to dip into funds earmarked for investments.

4. Measuring Progress

I love tracking progress visually, so I’ve created a spreadsheet where I record my savings journey. This simple habit has been incredibly motivating. Watching the numbers grow month by month builds momentum and helps me stay committed to my $60k goal. Seeing progress laid out clearly makes the process feel more manageable, even when the end goal is still months away.

5. Making Conscious Financial Choices

I’ve also made some deliberate financial decisions that may not be typical but are essential to my strategy.

Choosing Not to Pay Down Student Loans

I still have student loans, but I’ve chosen not to prioritize paying them down aggressively. Why? Because the interest rate on those loans is relatively low, and I believe I can get a better return by investing instead. Plus, by focusing on growing my investments now, I’m gaining experience and skills faster. Of course, I make the minimum payments, but for me, the ROI on real estate and other investments is higher than paying off my loans early.

Long-Term vs. Short-Term Financial Trade-Offs

There are trade-offs. I’m saving heavily right now, which means I’m forgoing some luxuries like new cars or expensive trips. But for me, this sacrifice is worth it. I’d rather delay gratification and set myself up for financial freedom in the future than splurge now and struggle later.

Conclusion

Saving for your first investment property isn’t easy, but with a clear plan and discipline, it’s achievable. Whether it’s maximizing savings through multiple income streams, taking advantage of high-yield accounts, or making conscious financial trade-offs, every step counts.

If you’re on a similar journey, I encourage you to take the time to figure out what works best for your goals. It might be different than mine, but what’s important is staying focused and patient.

I’ll continue to share my progress, and if you’d like to follow along, feel free to connect with me on Instagram at @garrettjohnlaw_ for updates and insights on both my real estate journey and software projects. Let’s grow together!