What is the best strategy for beginners?

9 Replies

I am 19 years old and in military right now as E2. I don't have savings yet but I'm trying to save as much money as I can to start investing. What do you guys recommend to me to start investing? Do I have to save a lot of money for later investments or is it possible for me to start investing right now? 

What type of investing do you want to do?  Buy and hold or fix and flip or just wholesaling?

Wholesaling could be done with little to no money.  Buy and hold will require a lot more if going the conventional bank financing route. 

Are you reserve or active duty?

@Ian jayne Pallasigui  It's great to hear that you are already thinking about real estate and investing at such a young age. It took me until I was 27 to have that much foresight haha. 

You've already taken a great first step by joining Bigger Pockets...so, well done! I'd recommend that you start by reading as much as you can about real estate. The base library (if y'all have one in gulfport) is an awesome resource. I checked out a number of books on real estate at my base library when I was getting started. Brandon Turner wrote two articles that I would highly recommend you read (if you haven't already)  The Best Real Estate Books Ever and  Investing in American Real Estate While Serving in the US Military . So definitely check those out.

As for the strategies....Do you live on base? or have you moved off? One great aspect of the VA loan is that you can buy multi-family properties (one-family up to four-family) with very little money down. This means that when you move off base you could potentially buy a multi-family using the VA loan, rent out the units, live for free yourself, and make cash flow on top of that. People refer to this as "house-hacking" and its a great way to get started cheaply.

In terms of saving...start now by "paying yourself first." That pretty much means that you should take a percentage of your paycheck (whatever is comfortable for you...5%, 10%, 15%) and put it away in a savings account before you even see it. This will slowly build up some cash that you can use towards an investment in the future.

Hope this helped. Best of luck to you and let me know if there is anything I can to help.

Tyler

@Ian jayne Pallasigui  Study > Observe > Act.

Read about the various types ways people invest in real estate related investments, including single family homes (buy/sell and buy/hold strategies), apartment and commercial income oroperty and notes (mortgages secured by real estate). Study how money works and how to use a calculator (you can get a great HP 10Bii app for you iPhone for $5).

Listen to free podcasts and other recordings from people you find on BP and elsewhere.

Treat experienced real estate pros to lunch when possible. Listen to what they say and watch what they actually do. Both are instructive (but may be different).

Don't invest in any substantial training expenses until you ready to implement. 

@Ian jayne Pallasigui  you have a tremendous opportunity to save and begin investing now.  ~90% of everything you need is provided for you while you are in the military.  The question then becomes, what vehicle and how much electronics do you need to keep up with your buddies?  Or do you have the financial discipline to take full advantage of the opportunity you have to save and create a huge head start on your investing for a lifetime?

Here's what I would do, if I was 19 years old serving in the military today. I would take 50% of my monthly income and have it automatically drafted from my direct deposited pay account. I would have that automatically invested in a Vanguard Money Market Mutual Fund in a Regular Account (this is basically a parking place that is very low cost and accessible by check writing). I would have 400/month automatically invested from that account into the Vanguard S&P 500 Index Fund every month in a Roth IRA Account (this offers diversified investment, low cost, no commissions, market rates of return, earnings and growth are never taxed again). I would not change the investment based on anything that I see on the evening news. When the market goes way down, I get a lot more for my automatic investment and it's like there's a sale - I get more for my money. One day, after I've experienced some accumulation and growth, I will have options for what I can do with my Roth IRA account that can include REI. The funds that accumulate in the money market account are accessible and can be put to work in REI as soon as I have enough to have a cash reserve and start buying RE.

Education wise, read, read, and read some more.  My first book recommendation is always "The Millionaire Real Estate Investor" by Gary Keller.  You've got some good advice already above this.  Just don't rush it and take the time to learn so you can invest with confidence knowing why you are doing anything and everything that you do as an investor.

I am not affiliated with vanguard.com but I have used them for years and they set the standards for low cost mutual fund investing.  This strategy is based on today's tax laws and shouldn't be considered tax advice, just what I would do based on my goals.

Welcome!

My husband is active duty Navy. We bought our first house using our Va loan two years into his career. We put no money down and use our income to fix it up. For use we have used a two fold strategy. We buy personal property at every duty station it make sense. They are all bought with the final intention of being a rental, although short term they are used as a personals. We rent them out when we are transferred. This allows us to acquire rental with very low entry point as personal properties using the militaries "transient" nature as a positive.

We have had lots of friends rent rooms out of their house allowing them to live free while continuing to save money and build equity in their home. 

The other thing that we have done is focus on our careers. We have worked very hard to continue to progress and advance. We live off one income and save the other. This has allowed us to have the money to fund our investments. Since my husband has a security clearance we have contained the partnerships to our marriage. 

Being wise and using strategy, you can do awesome thing with both your military career and real estate. Our goal is to use our cash flow to permanently retire from the navy, allowing early retirement and FIRE at 42 and 44. 

@Ian jayne Pallasigui  

Welcome. Thanks for your service. Time to build the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 90 past ones to catch up on.

Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.

Consider checking out HUD homes for small multi's owner occupied gets first crack.

You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good luck

Paul

I like the one from "In A Day Development": inadaydevelopment (dot) com.

Rarely do you have the opportunity to meet and talk to app developers as I have with the two young guys who make and sell this. I have Apple version however I understand Android is available, to..

The original one that I purchased from Ernest Brock is excellent, too and he has been exceptionally responsive.

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