Recent College Grad Seeking Advice from Experienced Investors and Flippers

9 Replies

Hi Guys!

I'm currently researching how to start investing and flipping properties specifically around the Chicago area or possibly the Minneapolis area. A little background info, I just graduated with a degree in Finance in June, I'm 23 years old and I currently work for a Fortune 500 in an entry level position (so I definitely do not have the capital to throw some major buckaroos down). 

I was hoping to get some personal advice from anyone who has experience with this and how to get started. A couple of questions I have are :

1. How and when did you start?

2. How did you save up for your first property and the down payment?

3. What resources did you use when you first got started? Was it all through networking?

4. What were some of your major challenges? 

5. Who were/are some of your major business partners? 

Thanks!

@Account Closed  

 Congratulations on graduating, getting a great job and deciding to invest in RE at such a young age! You are ahead of most of the people in the World. I hope you realize that your income is in the top 10% of income earners in USA and in the World!

With that income, I will advice you to do the following to get started:

1. Start right away by taking advantage of the low interest rates (3.75% for FHA and .8%PMI). Buy a 3-4 unit building, owner occupant with 5% down, FHA or 203K FHA construction loan. You need 5% downpayment, which could be gifted to you by family and ask the seller to pay your closing cost. After a year you can move out and buy your next property as a owner occupant with a 5% downpayment conventional loan, which should be easy to safe while leaving in the 3-4 flat.

2. As I just said, you can have the 5% downpayment gifted to you by family or ask your lender of the sources of downpayment that could be gifted to you. There are plenty in IL, and have the seller pay the closing cost.

3. I did exactly what I advice you to do.

4. Mindset. Believing that is possible. Remember - if there is a will - there is a way!

5. My lender, my attorney, my CPA and mentors along the way (other Realtor that own a lot of property, friends that own property, people I reached out to).

Good luck to you!

Welcome to Biggerpockets! 

We got started at 23 :) My degree was in finance with a minor in accounting. I went on to get a MBA.

I got started as a executive secretary in commercial/apartment real estate and slowly worked my way up with lots of bumps along the way :0

On personal level, we got started in investment as buy and hod with a personal property. There is a really low entrance cost. Prior to buy our first house we rented with another friend/couple. For us this was an amazing situation having roommates, and I really recommend it. Buying a primary property whether it be a single family home or  multi-plex. Is a great way to leverage a personal property with a low downpayment. This allows you to get your foot in the door with the great W2 salary, without having to put a lot of money down. We always lived frugal on one income while saving the other. This allow us to start buying pure properties.

I had the amazing opportunity to talk about our strategy and how we got started in podcast 103. Let me know if I can help :) 

Getting started young, even if poor (that was us) is still VERY doable :) 

Thank you so much for your advice! What do you believe would be the best first step for me to accomplish as I start this journey? I don't really know who I should reach out to or what my first major step should be. I have college loans, so I'm not sure whether or not this might hurt my chances in getting a loan. 

Also one other question, do you think its possible to get into real estate investing while still maintaining a full time job? 



Originally posted by @Elizabeth Colegrove:

Welcome to Biggerpockets! 

We got started at 23 :) My degree was in finance with a minor in accounting. I went on to get a MBA.

I got started as a executive secretary in commercial/apartment real estate and slowly worked my way up with lots of bumps along the way :0

On personal level, we got started in investment as buy and hod with a personal property. There is a really low entrance cost. Prior to buy our first house we rented with another friend/couple. For us this was an amazing situation having roommates, and I really recommend it. Buying a primary property whether it be a single family home or  multi-plex. Is a great way to leverage a personal property with a low downpayment. This allows you to get your foot in the door with the great W2 salary, without having to put a lot of money down. We always lived frugal on one income while saving the other. This allow us to start buying pure properties.

I had the amazing opportunity to talk about our strategy and how we got started in podcast 103. Let me know if I can help :) 

Getting started young, even if poor (that was us) is still VERY doable :) 

Thank you so much for your advice! What do you believe would be the best first step for me to accomplish as I start this journey? I don't really know who I should reach out to first or what my first major step should be. I just want to make sure I start off on the right foot. 

Thank you :)


Originally posted by @Lumi Ispas :

@Nadeya Hassan 

 Congratulations on graduating, getting a great job and deciding to invest in RE at such a young age! You are ahead of most of the people in the World. I hope you realize that your income is in the top 10% of income earners in USA and in the World!

With that income, I will advice you to do the following to get started:

1. Start right away by taking advantage of the low interest rates (3.75% for FHA and .8%PMI). Buy a 3-4 unit building, owner occupant with 5% down, FHA or 203K FHA construction loan. You need 5% downpayment, which could be gifted to you by family and ask the seller to pay your closing cost. After a year you can move out and buy your next property as a owner occupant with a 5% downpayment conventional loan, which should be easy to safe while leaving in the 3-4 flat.

2. As I just said, you can have the 5% downpayment gifted to you by family or ask your lender of the sources of downpayment that could be gifted to you. There are plenty in IL, and have the seller pay the closing cost.

3. I did exactly what I advice you to do.

4. Mindset. Believing that is possible. Remember - if there is a will - there is a way!

5. My lender, my attorney, my CPA and mentors along the way (other Realtor that own a lot of property, friends that own property, people I reached out to).

Good luck to you!

I manage 11 homes, maintain a full time job, life, starting a blog/website PLUS obtaining 3 more houses WHILE holding down the fort for an always gone husband! So yes, if you put your mind to it anything is possible :) 

oh and 1/2 of my houses are accross the country and we self manage them all  so.....

We got started by turning personal into rentals. We have always use a realtor. Everyone has their own strategy. Check out the blogs, forums, etc

HI Nadeya - you're certainly on the right track with the right mindset! Keep listening to the podcast and join the Chicago meet up that happens monthly. 

I'm a full time Finance Manager and wanted to self manage, I also travel a lot so having property that I don't have to frequently visit was a must. I started on BP one year ago and just signed on my first property this week (3 flat in Pilsen). I found it helpful to find an agent that is knowledgeable in the area that I wanted to invest. He or she can guide you on potential rents and home values. Also helps if the agent has experience in REI.

@Elizabeth Colegrove  has a fantastic podcast on managing from a distance!

The key is to create your investment criteria and get out there and search!

Best of luck

@Account Closed  , first step is to talk to a lender to see how much you can approved for with your income and student loans. I will message you with the info of few great lenders.

First step: determine your unbelievably unrealistic 10 year, 5 year and 1 year goals. I mean set the bar high. Then ask why do you want to meet that end? 

"I want to achieve a net worth of $50 million in ten years so I can generate enough passive income to support my lifestyle goals, give x amount to my church and make sure my parents are taken care of as they reach their retirement." Get it in writing so you can see the words (your first business plan so to speak). 

Then work towards those goals backwards to setup yearly, monthly, weekly and daily goals. You need to understand and learn investment models and systems regardless of your goals. 

Ask yourself: What do I need to do today to achieve my investment goals? From there you can begin to have a conversation around how you will get there. Don't start buying properties randomly or without a clear vision of where you want to be and how you want to get there. If you're not sure then talk to people and let their experiences and trusted advice guide you. Let their experiences save you time and money to stay laser focused on your own goals. No sense in not learning from someone else's wisdom and mistakes. Get a mentor or group of mentors. 

The absolute most important foundation to any business goal is to surround yourself with the right network of like-minded business professionals to achieve your ends. You're off to a good start on this website but there are lots of other sources and networks to cultivate as well locally here in Chicago.

 Don't underestimate the power of yourself. Go for it!

Hi @Nadeya Hassan

I just bought my first home/rental property last September in Chicago. I started looking at condos then I realize multi-units are a much better investment.

1. How and when did you start? 

I started looking at the beginning of last year. It took the whole year to find a place in my budget. I made over 10 offers on different places. It was frustrating but I finally got a 3 flat that I live in and rent out the other two units. It will be cheaper to buy if you are going to live in one of the units. The first thing you need to do is shop around for different mortgage rates and get pre-approved. 

2. How did you save up for your first property and the down payment?

I did a FHA loan and put 3.5% down. You will have to pay a monthly PMI but this will get you in a place faster than waiting to save 20%. I also raised my offer and had the sellers pay the closing cost. I also have student loans and a car payment so having good credit is what helped me get the loan.

3. What resources did you use when you first got started? Was it all through networking?

I use zillow and found a realtor who really helped me. I didn't have a lot of connections and I just found out about Bigger Pockets! 

4. What were some of your major challenges?

Finding a place within a budget. If something new comes on the market you will need to go see it that day. The good ones go really fast.

5. Who were/are some of your major business partners?

My broker and realtor helped me through the process.

If you have more questing feel free to message me. I would also be glad to share who I used in this process. 

Best of Luck

Richelle

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