20 years old , inexperienced, seeking first investment

[Daniel Kries]

Hey guys I'm currently serving in the military with 40k to my name. I plan on deploying that in the next couple of months but am unsure where I should invest and what I should purchase. I'm extremely ambitious and looking to fill my time outside of the military with real estate. I'd love to hear what advice other investors would give looking back to the age of 20 knowing what they know now.  Any advice would be GREATLY appreciated, thank you.

[Tony Iwen]

I can start off by saying thank you for serving. You all can not be thanked enough for what you do.

Second, I am also in my 20s and just started my investment journey. It can definitely be a scary thing to get started in. I would say that I am thankful that I had some good mentors in my life.

My personal opinion is start looking at house hacking in your first investment. With 40 thousand that is a nice piece of change to get started with. You’d be able to find a nice multi-family house you could get into with 3-3.5% down and have a bit left over for emergencies as well as improvements to the property to increase its value in the first year of owning it.

Again, this is completely my opinion. Keep learning and asking questions to find the best spot for you, but I don’t think you can learn more than being immersed as a landlord in your own house.

Best of luck. Keep me posted on where your journey takes you! 

[Danny Polanski]

I agree 100% with Tonys post. 

I would also suggest reading some home maintenance books or researching handy man/maintenance diy type learning or apprenticing.

That will help you self manage, and be confident without depending on contractors for everything. 

[Matthew Schellberg]

Welcome aboard!  You have a great mindset to have at such a young age.  Your best asset is time!  

But hey, this video pops up my dashboard about a military vet and his progression in real estate investing.  Being in the military enables you to access opportunities that civilians can’t.  It’s BiggerPockets Episode #677 with David G, Jamil, and Taylor (the vet).  I’d start with the podcasts on BiggerPockets.  They give you ideas and resources that will prepare you to utilize that 40k.

[Daniel Kries]

[Daniel Kries]

Quote from @Matthew Schellberg:

Welcome aboard!  You have a great mindset to have at such a young age.  Your best asset is time!  

But hey, this video pops up my dashboard about a military vet and his progression in real estate investing.  Being in the military enables you to access opportunities that civilians can’t.  It’s BiggerPockets Episode #677 with David G, Jamil, and Taylor (the vet).  I’d start with the podcasts on BiggerPockets.  They give you ideas and resources that will prepare you to utilize that 40k.

Hey Matthew, I will definitely give it a listen too. Thank you for the reply.

[Daniel Kries]

Quote from @Tony Iwen:

I can start off by saying thank you for serving. You all can not be thanked enough for what you do.

Second, I am also in my 20s and just started my investment journey. It can definitely be a scary thing to get started in. I would say that I am thankful that I had some good mentors in my life.

My personal opinion is start looking at house hacking in your first investment. With 40 thousand that is a nice piece of change to get started with. You’d be able to find a nice multi-family house you could get into with 3-3.5% down and have a bit left over for emergencies as well as improvements to the property to increase its value in the first year of owning it.

Again, this is completely my opinion. Keep learning and asking questions to find the best spot for you, but I don’t think you can learn more than being immersed as a landlord in your own house.

Best of luck. Keep me posted on where your journey takes you! 

 Hey Tony, Thank you for the response. I currently reside in panama city, Florida and the listings for multifamily are rare. Any advice on contacting off market sellers in the multifamily space? 

[Eliott Elias]

Hold all your properties, don't sell. 

[Nathan Gesner]

Quote from @Daniel Kries:

You can house hack with 0% down using a VA loan. Buy a fourplex. Use your BAH and pay yourself rent. Collect rent for the other three units. That should cashflow. Once that is stable, use the $40k to buy something else.

[Jaron Walling]

LIVE AS CHEAPLY AS POSSIBLE. Don't blow a $1 on a new car, motorcycle, truck, SXS, or toys. My brother-in-law has been in the Marines for 16 years. He meets guys all the time who buy new cars with terrible credit. There broke continuously paying high interest rate auto loans. Drive a beater for 5 years and invest in assets instead. Follow what @Nathan Gesner said because house hacking is an easy win-win. You're young, motivated, and willing to live with other people. Take advantage of the situation and you could end up with 2-10 doors within 5 years.

[Daniel Kries]

Quote from @Nathan Gesner:

 Hey Nathan, thank you for the response . Do your thoughts change knowing that duplexes in my area are being sold in the 400 - 500k range and I don't receive my BAH till the end of this year.

[Scott Trench]

I'd encourage you to reach out to @Jabbar Adesada - he has a great story of military investing success and may be of help to you. There's no reason you can't use the wonderful advantages of military life (many duty stations that are great for investing, VA loan, and in some cases, career starter loan) to start to amass a solid portfolio that can set you up for life.

[Doug Spence]

@Daniel Kries Welcome to Bigger Pockets! There are lots of active duty military folks on these forums (myself included) who also invest in real estate, and we love helping each other out. 

Before you think about a location and a strategy, I would do some serious thinking about your long term goals. You can achieve anything you want, but before you start, you need to decide what it is you want to achieve! What do you want your life to be 5 or 10 years from now? Are you still in the military? Do you have a family? How do you spend your time? What's your income/expenses? No need to answer these in this forum, but I would write down your answers and be as detailed as you can. 

How can you chart a course if you don't know where you want to go? Once you have a better idea where you want to go, the path to get there will start to reveal itself.

Good luck and keep us updated on your journey!

[Bud Gaffney]

Congrats for getting into the game of FREEDOM! Take that 40K and house hack. Buy a 3 or 4 unit multi and get going. You won't regret it.

[Jay Thomas]

Holding onto your properties can be a great way to generate steady income. By not selling, you can reap the benefits of your property's appreciation over time and enjoy passive income from rental payments. Plus, with some patience and savvy investing, you could eventually turn your portfolio into a booming real estate business. It pays to hold tight to all that you've worked so hard for!

This strategy of 'buying and holding' has been around for decades, but it pays to remember that nothing lasts forever. Regularly review your portfolio to make sure you're still on track to reach your goals and consider selling if necessary. That way, you can stay one step ahead in the ever-changing world of real estate! Good luck out there!

[Steve Vaughan]

Avoid buying anything right outside base, especially a Mustang at 29%.

Right up there are strip clubs and tattoo shops.  What is allowed to exist so close to base is a slap to all service people. 

Hang out with like-minded savings/investing people. Not always easy to find. My two best battle buddies and I had a savings rate over 50% while all others were blowing it.  

Then househack.   Then buy a rental in a market you know well or you will return to when you EAS. 

[Eric Rosiello]

Definitely agree with everyone on the house hack - ideally a 3 or 4 family. Find one that needs some work and choose an area that can fetch high rents for updated units (i.e. buy the worst house in a nice neighborhood). Take your time on the search and buy something that you know will cash flow very well and has appreciation upside - it is very important to have good numbers and buy right! Most of your value will come from buying at a low price then doing the initial rehab and re-leasing. Doing this right will allow you to reinvest in more properties. If you don't do this well then you won't have the funds to reinvest. Good luck, you are off to a great start having $40k saved up at age 20!

[John O'Leary]

Hey Daniel,

I second Tony's response. Thank you for your service! The best advice I could give is to find a coach or mentor. Education is the easiest way to skip the line, collapse time, and to learn from someone who's been there. I'd be happy to connect and offer any mentoring/coaching at no charge. Best of luck!

[Jabbar Adesada]

I love this community! Thanks for adding me on this thread @Scott Trench. 

Hey Daniel I was in such a similar position to you it is not even funny. I am 21 years old now with 10 units with 3 more under contract, active duty marine, NO BAH, travel a bunch, and super ambitious. 

My biggest advice is to focus on building relationships with as many real estate investors, agents, wholesalers, and contractors as you can. You should absolutely leverage your VA loan to house hack in Panama City, Florida.

Somewhere within an hour vicinity of you is a smoking deal hopefully a quadplex where you can live in one unit and rent out the others as long term rentals, rent by the bedroom, medium term rentals, or short term rentals. There are other variations of producing cash flow with your VA loan I did not mention. House hacking in my opinion is probably the simplest and best way to get started because you'll learn what it is to be a real estate investor with possible no to extremely little money out of pocket, and build wealth through cashflow, appreciation, and loan pay down.

I would listen to all the podcast episode you can while you are on the search for your first deal, I would recommend using a realtor for your first one to hold your hand through the transaction, preferably someone who owns a ton of real estate in the area you want to invest in and even better if they have house hacked themselves so you can use their insight to your advantage. Furthermore, I would also while you are on the hunt for your first house hack and listening to as many biggerpockets podcast as possible, reach out to other investors and learn what they do and what typically is most successful in your market. I have bought three deals off market at great prices, from these people in my market simply because they liked me and wanted to help me due to me being young. Use that to your advantage and get around as much success as possible. Lastly, you will run out of money fast so focus on becoming skillful in whatever niche you chose to start with so that eventually you can help other people build wealth by using their money to buy even more real estate. @David Pere has an awesome group of military guys/gals that will help supercharge your knowledge of how to leverage your military status to millionaire status. 

Don't hesitate to reach out to me if you have any questions always happy to help, with nothing to sell.

Jabbar

[David Pere]

Quote from @Jabbar Adesada:

I love this community! Thanks for adding me on this thread @Scott Trench. 

Hey Daniel I was in such a similar position to you it is not even funny. I am 21 years old now with 10 units with 3 more under contract, active duty marine, NO BAH, travel a bunch, and super ambitious. 

My biggest advice is to focus on building relationships with as many real estate investors, agents, wholesalers, and contractors as you can. You should absolutely leverage your VA loan to house hack in Panama City, Florida.

Somewhere within an hour vicinity of you is a smoking deal hopefully a quadplex where you can live in one unit and rent out the others as long term rentals, rent by the bedroom, medium term rentals, or short term rentals. There are other variations of producing cash flow with your VA loan I did not mention. House hacking in my opinion is probably the simplest and best way to get started because you'll learn what it is to be a real estate investor with possible no to extremely little money out of pocket, and build wealth through cashflow, appreciation, and loan pay down.

I would listen to all the podcast episode you can while you are on the search for your first deal, I would recommend using a realtor for your first one to hold your hand through the transaction, preferably someone who owns a ton of real estate in the area you want to invest in and even better if they have house hacked themselves so you can use their insight to your advantage. Furthermore, I would also while you are on the hunt for your first house hack and listening to as many biggerpockets podcast as possible, reach out to other investors and learn what they do and what typically is most successful in your market. I have bought three deals off market at great prices, from these people in my market simply because they liked me and wanted to help me due to me being young. Use that to your advantage and get around as much success as possible. Lastly, you will run out of money fast so focus on becoming skillful in whatever niche you chose to start with so that eventually you can help other people build wealth by using their money to buy even more real estate. @David Pere has an awesome group of military guys/gals that will help supercharge your knowledge of how to leverage your military status to millionaire status. 

Don't hesitate to reach out to me if you have any questions always happy to help, with nothing to sell.

Jabbar

 Thanks for the shoutout Jabbar, you're crushing it!

[Natalie Schanne]

@Daniel Kries - 100% recommend buying either a multifamily or a very large house (6 beds, 3 baths or with potential to convert it, usually 2100 sqft or bigger, and renting by the room.

The large single families are a lot more common to find, often with better layouts, newer, and cheaper per bedroom. You would then furnish the whole house (inexpensive stuff like from Facebook marketplace moving sales is usually good - you don’t want cheap stuff, you want expensive stuff that is 90% off because someone else is moving) and rent the rooms.

Comparison:

$300k - 1950's duplex 3/1 and 2/1, 1600 sqft, located on major road, rooms are tiny. You rent the 2/1 for $1500 and the 3/1 for $2000 for a total of $3500/mo. Assuming no STR.

$300k - 1980's 2400 sqft single family, listed on MLS as 4 bedrooms but really 6-7 bedrooms and 3 full baths. You furnish it and rent each bedroom for $800-1000/month for a total of $4800-6000/mo.

Mortgage for either is $3000/mo (I’m making it up) but one is more profitable than the other.

Note - if you rent rooms, you have to run your house like a tight squad. A single bad personality can snowball into squalor so you have to remove them immediately or screen them out upfront. I don’t allow overnight guests, indoor smoking, pets, etc. It’s just not conducive to shared living. You will find most people are quiet and stick to their 10x15 room playing Call of Duty anyway. They appreciate being able to rent a room for 20-50% less than renting an apartment. my customers are mainly actively working professionals making 40-80k/ year.

[Sam McCormack]

@Daniel Kries

Hi Daniel, I am in the same boat as you (19). I am an agent in Cincinnati. Are you looking to invest OOS? OR in your backyard?

[JD Monroe]

@Daniel It is great to see you headed in the right direction! We are holding our Investor meetup tonight at American Charlies in PCB at 6:00pm. there will be lots of other investors to chat with.