College Investing... Recommended?

Question

I am 21 years old currently in college for civil engineering. I have one year left before I receive my bachelor's degree. I have been reading, researching, attending webinars, attempting to analyze properties and much much more. I started learning about real estate for the first time in January of 2017 and I can't get enough. I am to the point where I want to invest so badly, but there are nerves that tell me, if I screw up and lose all my money, what will happen with college. I should just hold off, finish my last year of college, start working, and then invest on the side until I can obtain enough passive income to retire. Should I wait!? Should I go for it?? I am from Jackson, MI, however I am working a few hours north on an internship this summer. I would love to hear from anyone. I am willing to meet new people and learn from others. If you started investing in college, I would love love love to hear from you!

Thank you in advance :)

Billie Miller · Answer

Hi Brock, welcome to BP!

@Andrew Johnson is right, you will probably need some income before you will qualify for a loan. However, it sounds like you don't have that long until graduation. If I were you, I would focus on graduating and getting a good job. Simultaneously, I would start researching specific areas you want to buy in and start talking to lenders and real estate agents. That way, after you graduate and get a job, you will have the pieces in place to jump on something quickly.

I also think house hacking would be great for your situation. You would get your living situation as well as your first rental out of the way in one shot.

Matt K. · Answer

Crunch the numbers, you could probably lease (if you're cool with roommates) for near or less than a mortgage would be. This would allow you to save up and make a valuable investment in the future once you have stable employment. You're young, in school, and free... keep it that way. You're life situation will likely be much different once school is done and you start your career. Look at a amortization calculator.. you're not paying off nearly as much as you think to your principal. You're also not making enough to capitalize on tax benefits you get from buying.

I bet we could go on hotpads/zillow whatever and find a rental that'd outperform (read that as cheaper) than buying a house hack.

Jenifer Kynor · Answer

I would not invest until college is done and out of the way. The last thing you want is to invest, lose the money to attend college, and struggle to make it.

If you were really interested in purchasing, you could look at the option of living in the home yourself and renting out the additional rooms to some friends while you finish school. We all know that can get tricky too!

Best of luck to you!

Brock Hoffman · Answer

I appreciate all the feedback. I learned about house hacking through the bigger pockets podcasts and fell in love with the idea immediately. I wish I knew about this prior to my internships! My plan immediately after college is to house hack with the use of the 203K loan. I will continue learning the market and how everything works, and I will go from there. I am trying to attend RE events also.

Bob Okenwa · Answer

If you don't have money you can afford to lose, don't risk it. Only risk what you can afford to lose. With that being said, a house hack would be the safest and cheapest bet so you should probably go for that if possible and get a 203k loan to fix up the place so you can get in with basically as little money out of pocket as possible. Not sure if you have a job or not, but you should have W2 income coming in as well to hedge your risk a bit and to qualify for loans. Weigh the risks and make sure your numbers are accurate. Once you have that assurance, check the numbers again and if everything checks out (numbers, property, location, cash flow, CapEx, expenses, taxes, etc) go for it. Best of luck getting started and best of luck with school.

College Investing... Recommended?

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