How do I get started in real estate as 20 year old in college?

Question

I am 20 years old and am currently in college in Detroit, Michigan (also playing D1 soccer). Before college, I took a gap year and spent the time getting my real estate license (in New Jersey- where my family is from) and learning as much as I could about real estate. I want to get in the game of real estate any way that I can. I am very comfortable with risk and want to start making some mistakes that I can learn from.

If you were in my shoes, what would you do? More specifically, would you urge me to wait, keep learning and saving, or go for it with what I have? I have about $10k saved up that I am ready to use. My father does well in his career and is willing to cosign for me as well.

Ultimately, I think I would like to have several multi family houses, but I'm honestly not too sure. I am open to any option that would allow me to get started in real estate investing.

Also, is Detroit a bad market to start in? Would it better to go back to New Jersey to get started?

Nate Sanow · Answer

If I could turn back the hands of time, I'd go for lots of "base hits" in my 20's. Getting a house for 3.5% down, or 3% if non FHA and a local lender has a conventional product at 3%, or even 0% if your market has RD / USDA products… I would JUMP on that opportunity knowing you could rinse and repeat in 1-2 years (assuming you can save up again). And every time you move out, get it rented. Get a new one. Get your hands on a property that's relatively low maintenance. Get a tenant one at a time. Go slow but steady.

That’s just me. If you’re determined to get a house hack that’s fine but I know smaller multi family tend to be competitive. So there’s nothing wrong with buying a house and waiting a year to fully move out to rent it out and heck perhaps renting out a bedroom or two along the way.

Other things to consider are finding ancillary income streams in the general RE industry. Mortgage field inspectors, contractors, title companies, lenders, they all might have pt jobs or gigs. Or even some agents or brokers need pt help. Find a rock star realtor who knows her / his stuff and help with their social media if they don’t have time. Do it pro bono and get tons of free education and likely some quality mentorship. These are just ideas.

You have a lot of time.

Good luck to you.

Jonathan Greene · Answer

Save more while in college and plan your house hack around where you go after college. Detroit can be a good market for investing, but it's not really an ideal first investment market for a variety of reasons, still pretty volatile if you don't know all of the areas and where the appreciation ebbs and flows. Northern NJ is priced high for house hack, but you can do better in Central. I would keep learning and keep your license active while you finish and focus on college and then invest when you go to your next stop. No rush, although planning now is great.

Scott Mac · Answer

Hi Fisher,

Don't WANT to make mistakes, instead TRY do make good decisions....and DON'T (want) to make mistakes.

See the Tony Robbins video as to why: https://www.youtube.com/watch?v=3jq2rtLC5Iw

And if you have not already done so, maybe go tour the beautiful Fisher Building in Detroit (maybe you can buy it someday): https://www.google.com/maps/uv?pb=!

Paul Merriwether · Answer

You are in A great area to start your RE career. QUIT college!!! You are wasting your time if you want A RE career. No degrees necessary unless you want to be RE Broker. Detroit has it all ... cheap properties, lots of vacant land, middle income properties, upper class properties, Housing Vouchers!!! Everything you want in RE is in Detroit area. Join some Meetup groups, stay on BP and learn. TAKE ACTION NOW!!!

Join RE FB groups get with others in Detroit area. Start slow!!! Don't go buying some $3,000 fixer/ It takes money to make money!!! JV

with others on a solid deal where your investment will be returned fairly quickly. LEARN the art of the deals!!!TAKE ACTION NOW!!!

Duncan Hayes · Answer

@Fisher Hudak you can wholesale to build capital to purchase. Im from Southfield area and I’ve done deals in Michigan. Just have to know what you’re looking for and where To look!

Nicole Heasley Beitenman · Answer

A lot of excellent advice has already been given. I'll second (or maybe fourth?) house hacking. I hacked a SFH for 3 years; don't think that you HAVE to get a MFH to do it. Great thing about being in your early 20's is that you've already been sharing dorms and apartments and houses for years, so transitioning into house hacking doesn't make much of a difference in your lifestyle.

I'll also reiterate the importance of regularly attending your local meetup. It's crucial.

Finally, don't neglect BP. Treat it like another college course. I'd consume one podcast, one blog post, and 5-10 forum posts daily; one webinar each week; and read 10 pages of a relevant book each day.

Todd Vernon Chunn · Answer

Fisher,

There are 4+ investor meetups each month in the Oakland County area that you should attend and Network with other likeminded investors.

TC

Jeffrey Albaum · Answer

Hi @Fisher Hudak. Stoked you're starting your RE journey! A few folks have mentioned it already but if you know you're going to be living in your town for the next ~2 years at least - one of the best ways to start out is to buy a house that you can either rent out the rooms to your teammates/friends, or a multi family building where you can rent out the other units to teammates/friends. That way they're paying down your mortgage for you! Plus you can use a low down payment option to get into the property because you'll be living there.

Also - if you have the time, you could think about getting your real estate license in Michigan and begin working as a realtor in your local market. Hope this is helpful!

Joshua Janus · Answer

Is a house hack a goal of yours in the future? Study the requirements for an FHA loan like a book and make sure to set yourself up for success. Examples would be building up your credit, getting the most recent tax returns for the last 2 years in the same field, building up capital for the down payment, closing costs and 6 months in reserves so you can use as much of the rental income from the other units as your own income when you getting qualified. These are some barriers I had to make sure to be able to climb over. Let me know what questions you have.

*This isn't legal or lending advice, and you should seek professional assistance.

Kathleen Osborne · Answer

Fisher,

I know nothing about Detroit other than watching Rehab Addict on HGTV. They rehabbed many beautiful old houses. However, I speak from experience, working on OLD houses can turn into money pits. I'm wrapping up a rehab on one unit of a triplex built in 1900. My next purchase will not be more than 50 years old.

Like others, I wish I could go back to my 20s and start over. I didn't get into real estate until my mid 40s. I admire your risk taking youth. Use the calculators on Bigger Pockets and analyze every deal. Make some money (equity) when you first buy - don't offer over market value. When you rehab, don't buy the very best but don't buy the cheapest materials either. If you buy too cheap, you will be replacing flooring or fixtures before you want to.

Listen to all the podcasts you have time for. If multi-family is part of your crystal clear criteria, then aim there. You may just have to be a little patient to get your first deal - save more money while you wait.

Good luck!!!

How do I get started in real estate as 20 year old in college?

How do I get started in real estate as 20 year old in college?

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