New to Real Estate · San Francisco · Member since 2023 · 8 posts · 7 votes
Hi everyone, I am getting married later this month, and my wife-to-be and I live and work in the Bay Area. We are both in our early 20s and keep our expenses extremely low (less than $2k a month). We rent a room in a house. Do not own anything yet. I work in CRE sales, she's a nanny. We live off her income so I can focus on building my sales pipeline and saving capital to buy our first rental property. Our goal is to achieve a million in cash flow by 30. For those who have aspired to and achieved this, what would you do differently? How would you structure your finances? Or! What would you differently? I do like Dave Ramsey and think that leveraging in the beginning and paying off the debt as quickly as possible is imperative. What are others' thoughts? Our big goal is to have a large 8/9 figure+ portfolio by our mid 40s, owning multi-family, retail, and some single-family homes. I've read the blue (MREI) and red book (MREA) a few times. In the blue book, it says we need to invest $1m and own roughly $12M in properties. How accurate is this today and in the next ten years with inflation? Any/all advice is appreciated!
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
2y
Here's some basic math.
A renovated Triplex in San Francisco is listed for $2.9 million. You will need to put at least $600,000 down. Your monthly payment will be $15,000 and doesn't include taxes or insurance. Even if you could get $5000 per unit and every tenant was perfect, you would still lose money. Get one bad tenant and you could lose $20,000 more in the blink of an eye.
Renting, around the country, is much cheaper than buying right now. I recommend you continue to rent and save while educating yourself on how to analyze property and buy a good investement. I also recommend looking at other markets where your dollar goes farther and is more likely to produce a positive cash flow and move you towards your goals.
2. Get your finances in order. Get rid of debt, build a budget, and save. The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money. A wise investor will not try to get rich quick with shortcuts. If you can't keep control of your personal finances, you are highly unlikely to succeed in real estate investing. Check out my personal favorite, Set For Life by Scott Trench , or The Total Money Makeover by Dave Ramsey.
3. As you read these books, watch the BiggerPockets podcasts. This will clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.
4. NETWORK!!! Get out of your comfort zone. Stop hanging out with your deadbeat buddies that spend all day drinking, talking sports, and otherwise wasting away. Go to BUILD YOUR TEAM at the top of the screen and look for local investors or meetups in your area. You can also find real estate investing groups through meetup.com, facebook, or a Google search. Birds of a feather flock together!
5. Now you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books for this or you can learn by watching podcasts, reading blogs, and interacting on the forum. A handy search bar in the upper right makes it easy to find previous discussions, blogs, podcasts, and other resources. BiggerPockets also has a calculator you can use to analyze deals and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, recognizing a good deal will be much easier when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.
6. Study the market. You can learn to do this independently or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR who works with investors and knows how to help you best.
7. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. You could read 100 books and still not know enough because certain things must be learned through trial and error. You don't need to know everything to get started; you need a foundation to build on and the rest will come through experience and then refining your education.
You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g. "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is a forgiving world; the average person can still make money even with some big mistakes.
Realtor · Reno, NV · Member since 2019 · 1k+ posts · 938 votes
2y
Quote from @Account Closed:
Hi everyone, I am getting married later this month, and my wife-to-be and I live and work in the Bay Area. We are both in our early 20s and keep our expenses extremely low (less than $2k a month). We rent a room in a house. Do not own anything yet. I work in CRE sales, she's a nanny. We live off her income so I can focus on building my sales pipeline and saving capital to buy our first rental property. Our goal is to achieve a million in cash flow by 30. For those who have aspired to and achieved this, what would you do differently? How would you structure your finances? Or! What would you differently? I do like Dave Ramsey and think that leveraging in the beginning and paying off the debt as quickly as possible is imperative. What are others' thoughts? Our big goal is to have a large 8/9 figure+ portfolio by our mid 40s, owning multi-family, retail, and some single-family homes. I've read the blue (MREI) and red book (MREA) a few times. In the blue book, it says we need to invest $1m and own roughly $12M in properties. How accurate is this today and in the next ten years with inflation? Any/all advice is appreciated!
Congratulations on getting married!! I grew up in the Bay Area and moved to Reno, NV to live and invest. If your expenses are extremely low, why do you need $1mil in cash flow by age 30? Where did you come up with that number?
