I want to buy my first property @ the age of 21 and need advice!

23 Replies

I have been listening to biggerpockets since 2 years ago at the age of 19. I have probably listened to 85% of the podcasts throughout. I didnt want to invest right away because I wanted to make sure to save up a nest and build up my income with a stable job before jumping right into real estate investing. That being said, I have saved up over $55,000 living with my parents with roughly $20k of that invested in other assets. I make $50k/year and have roughly ~$35,000 to invest into real estate that I can get access to right away. My credit score is 766 and I am looking forward into possibly investing into a cashflowing duplex- triplex in the PORTLAND OREGON- SEATTLE WA Region. That being said, I am feel I am stuck with the question facing "Where do I start"? I dont know how to properly find deals. I also have to mention I will do all the rehab myself as soon as I get a property.  

@Daniel Vasilyuk 1.) contact a number of realtors.  2.) get your financing lined up and ready to go --> speak with a lender (or several).  

Once both a realtor and lender are sorted, you'll know exactly what is available and what you can afford.  The rest is easy.

Hey Daniel, 

You are probably looking at the Portland area as Seattle multifamily real estate is probably going to be too pricy to start out with your current income and savings. I started buying fixers when I was 26 and like you, did much of the work myself. I have a couple preferred lenders I could out you in touch with. 

Do you have a cashflow spreadsheet you are familiar with? If not I could also send you the one I use to calculate the potential of a property. 

I'd be happy to meet up and go over the process and key things that I look for when buying an investment multifamily. Let me know if that would interest you. 

Cheers, 

Seth Prickett 

@Daniel Vasilyuk Congrats on deciding to start investing in such early age!  

Here're a few things you should do:

1) Go on meetup site and sign up for REI meetups in your area. Start going to these events and identify the ones that are the most beneficial to you. Network with like-minded investors there.

2) There's a very high chance you will meet wholesalers, contractors, insurance agents, RE agents, and etc... at these meetups. So start building your team as will need to have the professionals lined up once you identify the property. 

3) At the same time, reach out to a few lenders and find out how much you can afford. Look at a few options, maybe including your parents to back up your financial position as one of the options or partnering up with someone else. 

4) Read books on multifamily investing. There's a ton of recommendations under the Education section of BP.

5) Feel free to PM me if you have any other questions.

Best!

@Daniel Vasilyuk

You are ahead of 99% of others in your age group based on where you are mentally and financially. 

The number one thing I would recommend is find someone in your market who has already done what you would like to do next and see how you can add value to what they are doing. Go to local real estate groups for networking and use biggerpockets to find investors and realtors who have already done what you want, in your market. There are many realtors who are also investors themselves. Reach out to them, offer to meet over coffee, whatever works for them. If you are handy and can do rehab, offer your sweat equity to partner and learn the process. 

If you are already comfortable with the next steps and want to act quickly, the other posters have outlined good initial steps above. 

Have you thought about house hacking in a duplex or triplex? That's a great way to get started and in my opinion takes off some of the pressure and risk of your first investment. You would also potentially be eligible for some better loans such as FHA and could keep a lot of your capital ready for deal #2 or any needed rehabs.

@Patrick Britton That was exactly what I needed to hear! Thanks. I will go to multiple lenders and see what I am able to get approved for! 

@Seth Prickett Yes as looked at the Seattle market and it the prices look wayy through the roof!! So I will defiantly stick to Portland and sorrounding areas. About that cash flow spreadsheet, I am very interested in taking a look!

@Alina Trigub Wow you defiantly got me excited to get out there and find a meetup around my area! I did not know meetups are potentially full of contractors, wholesalers, etc. I will defiantly take your advice.thank you for reaching out and Good points you have there!

@Manish Bahety AMAZING point you brought up there. I work in the construction industry and am very handy when it comes to remodeling. I will defiantly take not that I can add value to investors with my sweat equity like you said. Solid advice!

@Daniel Vasilyuk you sound pretty well off and ready to start... take the first step and call some realtors to put in offers that work for you. Don’t get stuck with “analysis-paralysis” because you are too smart and too well equipped (based on your posts) to get trapped by not buying something. If you’ve listened to that many podcasts you know the steps, just put them into practice, at your pace, and be successful.

I really want to underscore what others have said about finding the right lender. With your savings you will probably fit in the square box of a conforming loan of some kind for the first one. I would make sure that whatever  lender you choose is creative enough for YOUR NEXT DEAL to take it in house in case you dont conform with 20% down for Fannie, Freddy. You dont want to have to start from scratch next time. Once you start supplementing income with rental income your tax returns get messy for some lenders and they dont want to spend the time needed to make a deal work. 

Good luck!!

@Daniel Vasilyuk Looks like you're well acquainted with the site already, and doing a great job of preparing for investing.

BP has a great list of REI groups here: https://www.biggerpockets.com/rei/real-estate-clubs/

The best way to get over analysis paralysis is to be analyzing properties continually, so that you're comfortable with the numbers and ready to strike immediately when you find a good one.

I wrote a biggerpockets blog on the major metrics to understand when analyzing income properties as well as their formulas that may be helpful: https://www.biggerpockets.com/blogs/8814/73755-18-essential-metrics-to-a-complete-real-estate-investment-analysis

As far as how to find deals, there are many, many sources for properties:

Let everyone around you know that you're looking for a propertyhttps://www.biggerpockets.com/blogs/8814/72664-35-relationships-to-help-you-find-more-houses-to-flip-or-wholesale

Find deals on the internethttps://www.biggerpockets.com/blogs/8814/72016-55-resources-to-find-real-estate-deals-online

And find deals off the internethttps://www.biggerpockets.com/blogs/8814/71506-27-ways-to-find-off-market-and-wholesale-real-estate-deals-offline

Feel free to reach out if you need anything. 

@Daniel Vasilyuk

You don't always need a Duplex or a Triplex to house hack. With Portland and Seattle, you probably have a great area to buy a 4-5 bedroom house near a local college area and rent out 2 students per room. Assuming you could get 350/per shared room, you are looking at renting each room out @ 700/piece. 

Now, I would definitely "Rent proof" the place (Tile throughout, etc.), and this may not be for you (that is A LOT of college students) but if you are willing to live like this for a couple of years, it can give you a good leg up. 

instead of having to wait, or having to invest a ton of money, have you thought of investing using owner financing?

There is a guy here in the DFW area that buys 30 to 50 houses a year without using his cash or credit.

He then sells them with owner financing and makes crazy money doing that... and the best part, everyone seems to win on each deal he does. Seller and buyers are both happy. And he donates a ton of money to charity.

That is what I am looking to do.... seems a more powerful way to get started.

@Daniel Vasilyuk

Hey bud, how are you?!

First off, congratulations on starting to take the first leap! That's an exciting time!

Sounds like you have some liquid capital, that's good. Maybe you should wait to get a little bit more though. The only reason I say that, is because most of the hard money lenders that I know of, may want to see just a little more in the bank, but honestly, you're off to a great start. If you're not looking to use hard money on your deals, you may want to refer to another answer within this thread. I'm not terribly familiar with transactions that are not financed by hard money, or cash.

Have you attended any meetups in your area? Typically there's anywhere from 2-10 per day, at least in Chicago. Check out meetup.com and sort through the local real estate meetups in your area. I guarantee you can find someone who's already doing exactly what you're looking to get into already in your market. Take them to lunch. Tell them your situation. Ask them for guidance. Offer to work for them for free somehow to sweeten the deal for them. You will find a lot of great info on BP about how to start, how to finance, etc., but until you meet someone face to face in your market that can act as a solid mentor, it might be difficult to actually pull the trigger and buy. At least it would be for me.

So there you have it! Go out there and meet some people. A lot of them! Find a mentor to help you out. You're right there.

Hope this helps!

Hi @Daniel Vasilyuk , I am a investor/realtor in the the Vancouver market. 

You should definitely look into house hacking a 2 to 4 unit place. 

I did this with a FHA 203k loan which is a rehab loan with FHA financing. Some of the rehab things have to be done by contractors so you wont be able to do it all yourself but is a great way to go to jump in the game.
Keep your eye on the market every day as good deals move quickly and get bid up. 

PM me if I can help you out at all.

@Daniel Vasilyuk

Wow, i'm impressed you saved up 55k at the age of 21, great job. This will make your investing career so much easy while picking up momentum on the fly. 

Where do you start?

Get yourself a realtor, have him introduce you to some lenders, lawyers possibly contractors. Look into getting a 203k loan and try to buy a 2-4 units. You can live in one unit and rent the other 3 for cashflow. 

Use the bigger pockets calculators to get started 

@Daniel Vasilyuk understanding what you want and work backwards, my guess is you need to save more cash. 

if you are in sort of hurry, buy a house with lots of rooms and rent the rooms out to your friends and cash flow that way. Take advantage of your age, and that you have a family that will have you living at home. 

I would try and pick up another job or side thing, saying that no knowing your current job and hours to accelerate your income. 

Daniel, 

Congrats on saving up money and taking in the podcasts. 

If its your first deal and you plan on getting into multi family in those markets which are more expensive I would consider finding a knowledgeable partner to partner with. For those types of investments at minimum for it to not only make sense cash flow wise but for the bank to consider you as well you're probably looking at 20% down.  A partnership may be your best route.  

Originally posted by @Daniel Vasilyuk :

I have been listening to biggerpockets since 2 years ago at the age of 19. I have probably listened to 85% of the podcasts throughout. I didnt want to invest right away because I wanted to make sure to save up a nest and build up my income with a stable job before jumping right into real estate investing. That being said, I have saved up over $55,000 living with my parents with roughly $20k of that invested in other assets. I make $50k/year and have roughly ~$35,000 to invest into real estate that I can get access to right away. My credit score is 766 and I am looking forward into possibly investing into a cashflowing duplex- triplex in the PORTLAND OREGON- SEATTLE WA Region. That being said, I am feel I am stuck with the question facing "Where do I start"? I dont know how to properly find deals. I also have to mention I will do all the rehab myself as soon as I get a property.  

 IMO the absolute easiest way to start is with a house hack.

Buy a 1-4 unit house, and rent out as many units/rooms as possible.  Part of the advantage is offsetting cost you would otherwise have.  Ie if you are going to spend 1K/M on rent.  getting a 4 bedroom that costs 2000/M in mortgage and lease out 3 rooms for $500 gives you a great starting point vs what you would pay in rent.

@Austin Youmans love the fact that we reside in the same area and that you are on BiggerPockets defiantly means you understand others who are trying to reach for similar goals of house hacking with multiunit real estate. As soon as I talk to a lender and get approved, I will defiantly be talking to you about my first deal and exactly what I’m looking for. Thanks

I suggest living in the unit...Doing the rehab yourself (as mentioned)...Pick a unit in a good school district...only use premium products (no matter what the cost, but do try and get the best deals). Premium goods will help with warranty (ex: Everlast Siding has a 50 year warranty to protect your investment), long-term cost (since you are young and will/should hang on to them as long as you can and why I suggest a good school district for resale value 10-20 years from now when you have a family and real personal expenses and these lines have programs for young investors on the product side.

Also, IF YOU NEED A PARTNER...My team is developing a development arm of our business and looking for HOT areas in the US to invest/build Multifamily-ish properties...

Hi @Daniel Vasilyuk ,

Congrats on starting so young...I sure wish I would have done that. To keep things simple my advice would be to buy a SFH and house hack by renting some rooms to your friends. You will have a lot more options on where to buy and it should be easier to find something in a better location vs searching for a multi-family (most likely in a bad area). Best of luck and if you need advice on Vancouver, WA let me know I am here to help.

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