22 with 200k liquid looking to get my first property
hello everyone, i am 22 and the past several years i solely invested in the stock market which i have grown to a portfolio of 275k but i have always listened and been learning about real estate. i am now wanting to pivot to diversify and get my first property. thing is im stuck and having a hard time trying to decide what to do. I have 200k in liquid cash (yes this was self earned thru 5yrs of sacrifices and hard work 12-16hr days 7days a week with maybe a month in the summers as break to see family back home, but i dont want to do this forever)
My dad and I want to be partners going into these deals. there is a new construction 4plex i am looking to build which will be 775k that i will put 25% down (half me half my dad) which will cash flow net 2k /mo if i rent it out LT (COC of 11% which isnt bad and apparently my agent who recently worked on a neighboring new build said the appraisal after its built is mid/high 800s, also my plan is after 2yrs to REFI at lower rate). i am considering to have 2 of the units as MTR for local nurses or construction crews which of course can increase profits much more.
i also have a 3acre property that i am thinking to build small 2bd 1ba cabins and use as STR/MTR/LTR. but i am also wanting to do do STR as i love the concept and have watched Robuilt everyday learning from him. i am looking to buy land in a mountain/ski town (189k 10acres) and build a beautiful aframe and use as a STR. all these property ideas are close by to me so i will have a close look on them and will manage myself. i have just been consuming knowledge endlessly the last 3months in preparation for this decision.
but as you can see my head is all over and im unsure what the correct first step will be. i have many goals and visions of what i want to do i just need some help making a correct first decision on those who are far more experienced than me in this real estate space so i use my capital in the most efficient way. i understand real estate is long game and i have no issues with that but i would like to at a minimum cashflow 100k a month by the time im 30. this is a big goal but i have 8yrs to do this. thank you for your help i look forward to the responses
(side note: i am not considering house hacking as i live with my family, this will possibly be an option in the future)
Quote from @Mordy Chaimovitz:
Wait 3-6 months. Prices are still dropping and you will be well positioned to pick up a property all cash to BRRRR
Not in Anchorage they're not...
Quote from @Tanner Lewis:
Quote from @Ardian Selimi:
Quote from @Tanner Lewis:
Quote from @Ardian Selimi:
@Tanner Lewis the new build 4plex is already prepped to be built the builder is just waiting for a buyer before they start the project. so i wont have to go to a hard money lender. how its going to work is 10% of the total cost so 77500 i will have to upfront deposit to the builder. the builder will then go to get a construction loan and start the project. after 6months if i back out of the deal the builder will keep the deposit, if i continue then that deposit will count towards my down payment.
and the cabins i am thinking to maybe build myself with a blueprint/kit or have a local builder help me with them. i dont want to do anything crazy just a simple but aesthetic cabin. but yeah will require examining the land and getting permits and all that.
@Ardian Selimi are you looking to leverage on the cabins down the road?
as in get a HELOC on them?
As in a heloc, or cash out refinance, or any sort of financing
aha then yes. i would like to use them as a heloc, and possibly refi depending which route i end up taking. if i end up getting the new 4plex im thinking to use that as a heloc to help build the cabins. also i have a worn down greenhouse that is in front of my familys restaurant and im getting tired of looking at it and want to tear it down and build some units. i would have enough space for 12 1b 1ba or 8 1b 1ba & 2 2b 1ba. thing is that would be expensive but i would be able to be hands on considering its right in front of my store to make it more cost efficient. my dad already has 1 tenant in there on a little building attached to the greenhouse. thing is would tenants find it attractive to live next to a pizzeria? there is a popular weed shop right across from us too. i feel they wouldnt mind considering food/weed would be so close and we'd get business from them too so i can give them discounts. whats your thoughts on this? definitely big project but again im willing to do it.
Quote from @Salvatore Lentini:
@Ardian Selimi - others may disagree but I think ground up construction for your first deal is taking on an unnecessary amount of risk. Is the $775K inclusive of the closing costs, transfer tax, land, architectural drawings, engineering drawings, township approvals, legal fees, holding costs (during construction), realtor fees? Could end up being much more than that. Will also take longer than you project which will increase your holding costs. Being all over the place in the beginning is common. Pick one thing and go with it. Depending on your experience and what you end up learning will help guide you moving forward. You may completely change your mind after your first deal. I thought I was going to own a few dozen single family properties before moving on to multi but after 3 I bought a 14 unit and have never looked back going bigger and bigger on every deal.
if im not mistaken everything is already baked into that 775k except closing costs. and construction should take 6months tops. land is included (1acre) but if i had my own land builder said they'd take 65k off the price so 710k. yeah im just thinking whats best way to move forward. my first deal doesnt need to be perfect just want to build a nice base to build from
#5 Starting Out Contributor
- Lender
- Austin, TX
Quote from @Ardian Selimi:It does seem like a little bit if an aggressive play, but I would have to get some more details on the deal. Can you shoot me an email with the property address?
Quote from @Tanner Lewis:
Quote from @Ardian Selimi:
Quote from @Tanner Lewis:
Quote from @Ardian Selimi:
@Tanner Lewis the new build 4plex is already prepped to be built the builder is just waiting for a buyer before they start the project. so i wont have to go to a hard money lender. how its going to work is 10% of the total cost so 77500 i will have to upfront deposit to the builder. the builder will then go to get a construction loan and start the project. after 6months if i back out of the deal the builder will keep the deposit, if i continue then that deposit will count towards my down payment.
and the cabins i am thinking to maybe build myself with a blueprint/kit or have a local builder help me with them. i dont want to do anything crazy just a simple but aesthetic cabin. but yeah will require examining the land and getting permits and all that.
@Ardian Selimi are you looking to leverage on the cabins down the road?
as in get a HELOC on them?
As in a heloc, or cash out refinance, or any sort of financing
aha then yes. i would like to use them as a heloc, and possibly refi depending which route i end up taking. if i end up getting the new 4plex im thinking to use that as a heloc to help build the cabins. also i have a worn down greenhouse that is in front of my familys restaurant and im getting tired of looking at it and want to tear it down and build some units. i would have enough space for 12 1b 1ba or 8 1b 1ba & 2 2b 1ba. thing is that would be expensive but i would be able to be hands on considering its right in front of my store to make it more cost efficient. my dad already has 1 tenant in there on a little building attached to the greenhouse. thing is would tenants find it attractive to live next to a pizzeria? there is a popular weed shop right across from us too. i feel they wouldnt mind considering food/weed would be so close and we'd get business from them too so i can give them discounts. whats your thoughts on this? definitely big project but again im willing to do it.
