Young 20's investing - What are my advantages?

68 Replies

Money talks, so when you are at the negotiating table, you ought to place an emphasis on that over your age. If the numbers make sense, the seller will pick up on that. The biggest advantage your age gives you is the ability to start early, which can snowball.

Intern jobs could be a little bit different of what you can really expect from a 40-hrs/week full time job.  As an engineer myself, I really love what I do, cons are traveling too much and spending way too much time away from my love ones (and that's basically what drives me to continue investing).

Regarding your inexperience in REI, I would recommend to start small, get the experience to be a Landlord, and grow with time. I started REI at 23 (when I just graduated from collage and my dad offered me a deal). For quite a bit, I was not active acquiring properties, but with experience and seeing the cash flow and appreciation (rent or value of the property), it all made sense.

When I first read your post, I thought I would tell ya to do what I know now, (much older than you) invest, save, be responsible, but then I started thinking about my 20's. LOL

Keep in mind that time is the number one asset that money cant buy. My advice is some what unorthodox as this is, bigger pockets. I had some of the BEST  times of my life when I was in my 20's. The adventure, crazy spontaneous ideas, and lack of responsibility is what keeps me smiling even today. Dont get me wrong, im extremely happy and doing very well, but living by the seat of my pants simply because time was on my side was a new adventure with minimal monetary ramification's.   My advice to you is, live to your fullest, have some fun with your youth, obligations and time tend to change things. Investing is great, but dont forget you're in your early 20's, you have plenty of time. 

Time is your advantage.

Originally posted by @Nick Rutkowski :

@John Hunt

Time. Most people start investing after they accumulate tens of thousands in their 401ks or when they get sick of their corporate 35-45 I would say. Of course, there are outliers and some start older and some start younger. Your advantage is the decade of experience you’ll get knowing this information and implementing now versus your average investor. Don’t let anyone deter you, now is the best time to get into investing. It’s easy to get money, it’s hard have years of experience.

 Everyone starts investing at age 14-16. Everything you choose to do (get drunk on the weekends, going to college or not, put money into a 401k or into girls, etc.) IS an investment.

If I were you, I'd find a great paying job asap, and a living situation that allowed you to trade work for free rent or just low cost rent in general. Save as much as you can. Don't waste money. Eventually find a distressed property, live in it, fix it up, house hack. I'm just getting into real estate investing myself. I've been thinking about it for years. Now, I'm 29, and pregnant with my third child! So much more difficult educating yourself and attempting to find your first property when you have a family! I wished I started much earlier. The world is your oyster ;) 

@John Hunt you are young, full of energy, hungry, and anxious to make your mark on the world. Unlike a jaded old curmudgeon like me, every deal is important to you. Who wouldn't want to deal with that?

When you are my age, ask again, and I will tell you why someone wouldn't want to deal with some new pipsqueak like you that has no experience.

The point is sell your strengths. Everyone has some advantage, make sure those you work with, know what it is.

@John Hunt

When I was that age I was completely fearless. Almost wreck less. I wish I still had the red blood tenacity. I honestly felt like Tony Montana.

I remember working 3:30 am to midnight every Saturday after logging 60+ hours during the week.

When I had my second kid I went from real estate investing to kid investing. It pays a lot better and every day.

@John Hunt do the house hacking for the simple fact that you are cutting down on you living expenses

Time.... The biggest advantage.  It's the most precious resource.

@John Hunt I’m in pretty much in the same position as you starting to invest in real estate at a young age (I’m 20) only exception I didn’t go to college. But the world is at you fingertips right now if you do what it takes to become successful like they say “the early bird gets the worms first”. Youth is your biggest advantage honestly the early you get started the sooner you can start building wealth, there’s no age on investing you just have to make sure you have the knowledge to make a sound/safe decision. One thing I will say is don’t let anything that could go wrong derail you from your path things will be challenging but they are worth it, Best of luck.

I think lots of people nailed the advantages right on the head.

My quick 2 cents...Definitely take advantage of the fact that you don't have a family now, which usually becomes a priority at some point (i.e. when you start having kids). Make sure to READ. I've learned so much from reading on investing, different strategies, leveraging $, etc. You start that now and the disadvantage of not having experience will quickly be mitigated.

Lastly, don't get caught up with "keeping up the Joneses". Make sure to use you money wisely. I'd say hold off on buying any luxury/high-priced cars (speaking from experience). I wish I had spent my hard earned cash money on real estate rather than a used Mercedes when I was 24 :/.

Bro, your biggest advantage is your age!! I bought my first multi-unit at 21! now I'm 39 years old and own 14 rental properties, 2 personal homes and two LOTS! you have something a lot of us don't- which is time; time to mess up and pivot! great job bro! 

If I had started at your age, even making the mistakes I have made, I would be a "retired" millionaire at this point (age 40). Money you lose making mistakes is simply the price you pay for education. Why is it acceptable to pay 100k for a college degree but it's a "mistake" if you lose a few thousand picking the wrong tenant. You learn as you go and it's going to cost you money. Start as early as you can. Get the 9-5 to accelerate your real estate business and commit to it.

@John Hunt Well of course, you have time on your side. If you get, say, 10 properties before you're 30, and each property gets a rental income of $1000/month before PITI and other expenses, when you're 60, you'll no longer have Principle or interest, and can just collect fat checks. This is, of course, assuming you stop at 10 properties and do a 30-year mortgage scheme for all of them.

If you have a bit of resolve, you'll get better and better. You're also obviously very smart, and the great thing about real estate is that it's one of the few fields that actually rewards the more you know.

@Anthony Capaldi Start building your credit ASAP! If you don't have credit history, you can't get loans. If you can't get loans, you can't buy properties.


Your situation sounds just like mine 3 years ago. I was in the same position my last year of school, landed my first engineering job at a corporate firm. I elected to move back to my home town in NY as I knew if I was living in a bigger city I would spend much more money. I got an apartment after school with my girlfriend and we decided paying rent sucked. So we got a roommate that covered half of the rent then we split the remaining. I got serious looking for my first duplex and after a year of working I closed on my first property (house hack and brrrr'ed). After that property I bought a conventional investment property at 25% down. Now I am scaling my business in my hometown where prices are reasonable and decided it is better in the long run to stay within my local area. I left the corporate firm and now work for a very small firm about 20 minutes from my house.

I am now 25 and focus all my time after my 9-5 on real estate- Being in engineering you have a knack for construction and it helps in the long run. I was able to learn the hands on skills I drew on CAD everyday on my own properties. The lenders will use you college education and minimal job experience as the "2 year job history" to qualify for your first loan. Assuming your DTI and credit are decent you should have no issues on the financing aspect for your first buy.

You may make a little less in a smaller city/town but you will be able to save more and I think that is super important for landing your first deal.

Don't let lifestyle inflation get to you- you'll see your peers going on vacations, buying cars, financing useless sh*t ect- I fight it everyday. Don't get yourself into that mode. You'll be lightyears in front of your peers if you refrain. Live below your means and stack that cash! I save 90% of my w2 earnings- from the outside I look like I am just scraping by but I am not- it is my choice. 

If you have any questions for a 25 year old that was in your shoes a few years ago shoot me a message, whether it be engineering, first job or first buy. 

Good luck, you will be fine- stay on track and write down your goals everyday.  

Updated 5 months ago

Don't stop when someone says no (Lender, seller, agent ect). Keep going and don't stop someone WILL say yes.

@John Hunt age is such an advantage! I started at that same age (house hack) and it was perfect. Money was tough and it was a slow start but it gets easier.

You’ll definitely make mistake, but the likelihood that the mistake “tanks” you is so small. Just ran on mentors and keep asking questions in bigger pockets!

Assuming you are fiscally responsible, you could take advantage of 0% down mortgages and the fact that you are a first time home buyer and have little income. Most states/cities have programs where you can get money (sometimes you don't even need to pay the money back) for a down payment if you meet the (low) income requirements.  Also, like I said above, if you don't own any other property some lenders have 0% down mortgages so you could buy a house with as many bedrooms as you can afford and then you can buy that house with little to no money out of your pocket and then rent out all the other bedrooms to roommates and then you are in the game. Build up some equity in your first property while your roommates are paying your mortgage and save up for your down payment on your second property and then in a year buy the next property and repeat the process until you are rich. You'll own a bunch of rental properties by the time you're 30 and then you can retire and be a full time landlord. 

@John Hunt ,

Props to you for even thinking about real estate, let alone planning on doing it!

Your biggest asset is your degree/future income,  and the next biggest thing-- is that you are young and  seem personable, and people will want to help you succeed.    Start networking, and find a mentor, someone who you can help now since you have the time-- offer to volunteer to help them in any way you can, and they can show you the ropes.   It's a lot easier to grow when you have someone helping guide you on the right path!  They'll likely have the contacts, and that right there will cut out of a lot of headaches!    

Also-- your advantage now is to make friends with people that can help you in the future!   Find friends who want to be lawyers, CPAs, plumbers, HVAC technicians,  etc.... key word is NETWORK and focus on building friendships now, so that way you can have friends to answer questions!

@John Hunt You may not have a lot of money, but you have what older people don’t. You are a time billionaire and time is your friend.

I started my RE journey at 24. in 2010. After a refinance and a 15 year note in 2012. My first SFH property is 7 years into a 15 year loan at around 3.25% I can't buy that kind of loan now. By the time I am 40ish I will have a paid off rental. My original down payment would have been the same as a 1 week Mexican vacation for 2 people. Delayed Gratification then will reward in the future.

If I had know what I know now at your age, I'd be retired already.

Your advantage is your youth:

You have the time/energy to do a "second job" in real estate.

You have no wife/kids (assumption there) to support, so you can live like a hermit for a few years, house hack, and rack up some serious starter capital.

- plus you can move every year and get low FHA owner-occupied loans

You have a good paying job as an engineer, which will help you build your credit score and also make loans easier, negating the need for "alternative" financing to get started.

you have time.  The power of compounding applies in real-estate also, you can leverage time to acquire more and better properties, while still working your "real" job at a rate you can handle.

unless you fall suspect to "lifestyle inflation", your investment capital from work should increase quickly since as a young professional, you should see regular raises early in your career.  Don't spend it, invest it!

you can also hedge  your bets by maxing your employer 401k match and max your roth now, giving you options later on, because you never know.

Your penalty for failure is less., if worst case happens, and you crash and burn, at your age, overcoming a bankruptcy or having to walk away from a property, you can rebuild your financial picture well before it's a more significant part of your daily life when you are older, and might need to leverage credit for the bevy of financial demands that come later in life. when you do have kids, a house in the burbs, 3 cars, and college payments....etc.

Your lack of experience is the same as anyone else getting started, like me, twice your age.  Now that  I have a few years in, I "get it", you just can't learn it all sitting on the sidelines.

Good luck

Mouths to feed: 1 (yours)

Spouses to keep happy: 0

Children to take care of: 0 (that you know of)

Age is your biggest advantage young buck! Just don't over-analyze and know when the time is right to strike on your first deal. 

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