Guidance for a Young Investor

17 Replies

Hi everyone, I am a young investor seeking out guidance on my first deal. I've been educating myself for over a year on real estate investing, but feel that I'm stuck in analysis paralysis. I highly value any advice experience investors and have been really enjoying these forums. Thank you in advance for your thoughts and input! 

I am twenty-three years old and living in central Florida. I am self employed and have always been an entrepreneur. I currently run two woodworking businesses, and have saved as much as possible since a young age. The thing is, I've never invested in anything but myself and the businesses I create. I have about 100k saved and have never had any debt. I find that because of my age, I'm never taken very seriously when I seek out guidance with real estate investing. I've heard a lot of - 'it's harder than you think', 'it will not give you good returns', etc. While I know all of this is untrue, I'd really love to hear from someone who believes in investing at a young age. 

As I mentioned, I am a woodworker, so I spend about 8 hours each day listening to podcasts. Everything from Bigger Pockets, Listen Money Matters, Smart Passive Income, and Robert Kiyosaki. I read everything I can and am incredibly eager to get the ball rolling. If I have a plan and direction, I always go full force. If there's anything else I can do to educate myself, I'd love to hear your input.

My long term goal is to generate passive income through buy and hold rental properties. I'm comfortable investing out of state, but would be more comfortable with an intial investment in Florida. I wouldn't mind getting my hands dirty with fixing up rentals, as my partner and I are experienced with a variety of construction. Between the two of us, we are experienced with soffit, siding, roofing, flooring installation, carpentry, etc. We can cover a lot of bases together. I'm also open to fix and flip, but feel that it might be a safer idea to start that further down the line with a bit more experience under my belt.

I'm also interested in being an investor toward fix and flips that other individuals are handling. How would I seek out investing in this? What path would you recommend that I take?

One last thing - I would love to be a homeowner. I run my businesses out of my garage right now, and pull in about 80-90k / year. It would be wonderful to own my own home and workspace. Especially with the noise I create from power tools, I would be able to insulate my yard with more foliage to absorb the sound. While I don't plan for this to be a lifelong career, I expect to do it for at least a few more years or make it part-time someday. The real goal is to have a full income stream from real estate (at least 100k/year), and then pursue other small businesses on the side for enjoyment. While I'd love to be a homeowner, I would dish out at least 325k to purchase a home in my area, and I feel that investing this in rental properties would be a better direction. What do you all think? What would be the most lucrative way to invest?

Thank you for taking the time to read this post - I would love to answer any further questions and hear what you all think!

My recommendation would be to find a duplex triplex or four unit that has a garage you could turn into your workshop. Get a low down owner occupant loan and start your journey. I would give just about anything to go back to when I was 21 and pick up a little multi family to live in and rent out. Your age is a benefit if you buy your first property this year you could have a paid off cash cow when you’re 54ish. All the appreciation and cash flow over those many years will make you wealthy if you reinvest it!

Thanks, Jonathan! I'll do some research on multifamily units. And I'll definitely be reinvesting the cash flow - I appreciate the feedback. 

I’m working on a house near you. Maybe you’d like to see it before it’s done. There is a great variety of woods in this property, cherry, mahogany and so forth, that you’d appreciate. Let me know if you’d like to connect. 

@Samantha W., posting again  to tag you. 

Man!! I wish I started doing this when I was your age. but noooo my monkey butt was still watching  the smurfs, the snorks, and climbing trees like a dumbass! Damn it!

Analysis paralysis is a big deal. I struggled too. You know ... there is one way to conquer it. You just have to do the first step and just DO it.. whatever that step it. I am not saying go do something NOW.  Get as much info as you need to have an idea what you want to do and then just take that first step. 

Whatever that step is,  buy a website, buy a mailing list think of a domain name.. what ever.

(I highly suggest you get a website right now! Websites need to age and the sooner you gt one, the better you will rank)

You say "want to make your first deal". Are you talking about wholesaling?

BTW, I lived in Melbourne FL, and Palm bay. (Went to F.I.T.) good times.Almost got my *** bitten off by  a shark surfing... but good times.

Hello @Samantha W. I am a real estate agent / investor / flipper who lives in Palm Bay. There are a variety of options you could go. As mentioned, you could find a multi-family unit to get purchase. You could also use what you currently have to purchase multiple properties (if you feel that your woodworking etc needs more space and wouldn't work well with a tenant next door. I have some lenders that can help get primary residences with conventional mortgages for very low down - as low as 1 percent. From there you could venture out and purchase a couple other units putting between 10 and 20 percent down that could bring in additional money (you could technically buy multiple properties).

My business partner and I are currently finishing up 2 flips, have one more under contract and are looking for another if you ever want to connect and come see what we are doing. We love helping BP members. I have helped several purchase SF and Multifamily units in the area. I'm an open book, let me know how I could help.

you go girl - people who don't take you seriously now will be blowing up your phone soon enough. 

@Samantha W.,

Congrats on being so ready!    I'd suggest finding a multi-family home, and if it doesn't have a large garage, get one built for your business.    If you house hack, you'll be able to save even more!    There's never a "right" time, it's VERY scary when you jump in, because of all the unknowns.    

My advice... roll with it, stuff will go wrong, it will cost a lot, but you fix it, pay for it, move on!    The sooner you get the mentality that you expect things to go wrong, it's not a big deal, just part of business.   Also, on a positive note, the more stuff that goes wrong, the less stuff scares you!     Good luck! 

Originally posted by @Kerry Baird :

I’m working on a house near you. Maybe you’d like to see it before it’s done. There is a great variety of woods in this property, cherry, mahogany and so forth, that you’d appreciate. Let me know if you’d like to connect. 

 I would love to check it out before it's done! It would be wonderful to connect with other local investors. 

@Jerryll Noorden Thanks for the advice! Man, this community is really helping motivate me. I'm already shaking off this analysis paralysis. 

Creating a website would be a great step to take. I'm looking forward to connecting with some locals to pick their brains a bit. Very cool that you went to F.I.T. - I've been looking at some properties in that area. I'm really interested in renting out individual rooms to students. Seems kind of lucrative, especially with having their parents cosign. 

Also, I'm not totally into wholesaling, but rather buy and hold. As well as some fix and flips. I'd like to mix it up with both of those, as fixing up homes is my idea of fun, but definitely not something I want to sustain forever. Having the buy and holds is the ultimate thing for me! Even better - I'd love to renovate the buy and hold properties before renting them out.

Thank you for all for the fantastic advice. 

@Dwayne Byrd , I'll be in touch! I'd love to hear about your work in the area and learn from you. 

@Linda D. - I appreciate this advice! Multi-family really seems like the way to go. I really like the mindset of preparing for things to go wrong. Any type of business always carries unforeseen circumstance, but it provides so much more mental clarity to just ride the wave. Mindset is everything. 

@Samantha W.

it sounds like you are primed and ready. you know your stuff, you have capital to deploy, and you have a plan. There is nothing stopping you but you.

You said people tell you "it's harder than it seems" and you're right that isn't true, the opposite is true: it's far easier than it seems

In this business people only take you seriously when they know you can close. Otherwise: talk is cheap. don't be offended by it, by motivated to CLOSE

I'm willing to bet you're just scared to take that first leap because you think it's a big one. You don't even need your first deal to be great, just get one under your belt so you can get over this anxiety. you're in FAR better position to buy than I was when I first started!

What is your sticking point? how many deals are you bidding on weekly?

@Alexander Felice

Thanks for your advice - you're totally right. I am the only one who is stopping myself, and I'm ready to get the ball rolling. I haven't begun bidding on any deals at all. I've really just been stalking the MLS and driving around neighborhoods to get a feel for where I want to invest. I really appreciate your straightforward approach.

I was reading a post you made the other day and checked out your blog. I read a majority of your posts just a couple nights ago. It's some of the most insightful and helpful information I've read yet. 

When you say - be motivated to close - should I start working on getting pre-approved so that I have papers in hand? I'm so ready to take the next step. 

@Samantha W. Thanks for the kind words. you're the absolute best.

If you're analyzing deals then you're even closer than you realize.

here is what I would do.

go talk to a lender and either get pre-approved or talk to them about a strategy that will allow you to pay cash, then refi later. you want to include your lender early so you have a teammate working on the process with you.

At the same time, call about 5 realtors and ask them to send you lists of MLS properties daily. Then you can start analyzing actual potential deals. If you do this for even 2-3 weeks you'll start to know which deals are good and which are bad.

One day a good one will come across your desk, you'll know it because you're an expert now and you'll buy it. EASY!!

to be 100% sure, right before you send the Earnest money ask the people on this forum what they think and they will confirm that the deal you know is good, is good, and you'll be an investor.

MF'ing easy

agree to the extent you can house hack 4 plex in your area with FHA loan you get in with minimal down you live there a year.. you keep your powder dry.

with your skills I would look for value add .. buy one do the work  then refi.

don't go spending all your cash.. keep no consumer debt and keep collecting cash.. real estate will always be here.. it always has.. be selective and methodical and in a few decades you will be smiling.

@Jay Hinrichs     Thank you for your input! Finding a local multi-family home sounds like a great plan, but I'm having difficulties finding them in a decent part of town. I'd like to stay in at least a B neighborhood.

 What do you think about investing out of state initially? I'm okay with continuing to rent my primary residence. 

Perhaps in the Jacksonville area instead? It seems like neighborhoods there can be hit or miss, but I could always go check out the area first, as it's only a few hours away. 

hi @Samantha W. - it’s impressive what you’re doing so early in your career. 

I am also looking in that area of FL. One of the things I like to do is pool in. I realize you have capital to go alone but with this investing, scaling up gives bigger margins and better opportunities. Let me know if you’re interested. 

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