Looking for advice from experienced investors

16 Replies

Over the past 6 months or so I’ve become very interested in the real estate business. At the end of this year my term with the Marine Corps will come to an end and that is where I wanted to start my investing journey. In preparation I have paid off my debt, saved around $25,000 and started reading up on the subject. However, once I leave the military I plan on being a full time college student and don’t foresee myself having a lot of extra time on my hands to be able to devote to a rental property or house flipping business, which were my original ideas to start in. So I’ve been thinking of hold off it until after my schooling is complete. Any advice would be highly appreciated.

Welcome @Jeremy Bourgeois and thank you for your service.

If I could do it all over again, I'd buy a small multi-family (2-4) units with a FHA loan and house hack right from the start. And as soon as I could afford another down payment (after 12 months), I'd move and do it again, keeping the first one. You might have other, better financing options as a veteran.

When you analyze a deal, include property management expense, so it can be relatively hands off if you want. And if you have time and the inclination, you could self-manage to "enhance" your experience and pay yourself the extra.

Sounds like you're on the right track. Good luck!

@Simcha Davidman that helped a lot thank you! I’ve actually thought about house hacking before the only thing that bugs me is that where I will be going to college will only be a temporary location for me but I guess that is where the property manager comes into play.

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@Jeremy BourgeoisExactly. Property management can allow you to keep these long term and from a distance. But at the same time, a lot can happen in (presumably?) 4 years. Maybe you'll change where you want to live post-graduation. Or you can always sell the properties in a few years and move the capital with you.

@Jeremy Bourgeois

Thank you for your service!

Before you decide what niche to select within RE investing, you got to decide long term whether you want to be passive or active. Here's a post to guide you in the right direction: 

https://www.biggerpockets.com/member-blogs/10850/84064-what-type-of-investor-to-be-when-i-grow-up-active-or-passiv

Your next step would be to check out the niches within the path you selected. 

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Best!

@Alina Trigub thank you! Great article by the way. I think my approach would be something like a hybrid of active and passive investing. House hacking but once I move on from the first property having a property manager run the day to day on the previous used ones.

Thank you for your service!

With time being a factor in this, reverse engineer what you goals are and work backwards. If you have a clear and defined vision then you will land on your answer. Going back to school full time and investing passively in syndications or even private money lending would help create passive streams of income while learning slowly at your pace. You would generate some working income because your capital is working for you. Rinse and repeat in more opportunities. This would help you be able to focus all of your efforts in your studies instead of having to eat away at your capital slowly or go get a part time job in the meantime. 

Plenty of ways to tackle this. Since you were clear with your statement above, passive investments might seem like the most ideal option for you. That doesn't mean it necessarily is but please listen to the other suggestions and see which model truly fits what you would like to do. Passive vs Active is the conversation you basically are having. Time being the biggest focal point. 

Time is our most valuable currency. Happy investing and good luck going forward!

Jeremy,
Thank you for the compliment!

Hybrid is perfectly fine, as long as you stick to learning and doing one thing until you fully refine it prior to jumping into another niche!

Originally posted by @Jeremy Bourgeois:

@Alina Trigub thank you! Great article by the way. I think my approach would be something like a hybrid of active and passive investing. House hacking but once I move on from the first property having a property manager run the day to day on the previous used ones.

@Jeremy Bourgeois, I'd highly encourage you to get your first investment in place before you leave service.  Qualifying for financial products is much more difficult as a student than actively employed.  And I do like @Simcha Davidmans advice.  You need a place to stay during college.  You want to start your investing as soon as possible.  You could always use income from the beginning.  A 2 or 4 plex while in college that you lived in part and used the rest as investment would satisfy all those goals.

And the added benefits

1. If it's your primary residence you buy or if part of the property is your primary residence and you live in it for two years that much profit is tax free.

3. As several mentioned you can always hire a property manager after graduation.  Or do a 1031 exchange and purchase a new property where you live.  the 1031 lets you reposition your properties without having to recognize a gain or pay tax on the sale.  @Johnny Quilenderino, did this masterfully with us a while ago.  Hey Johnny you still out there??

@John Fortes thanks John! I definitely understand what you’re saying about working backwards from the end goal and I think I need to do that. Time is definitely the biggest thing! But that being said I think I will have enough of it outside of school to be able to actively invest but definitely slowly at first. I really appreciate the feedback everyone is giving, I was a little stuck in my head while trying to work my way around this.

I would not wait if I were in your shoes, the most time is spent on your education on the subject and the analyzation of the deal itself. Once you own it, managing or managing the property manager for one investment will not take up much time. The key is to buy right and know your numbers.

Good luck and thanks for your service. 

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@Dave Foster I actually never gave thought to the 1031 in regards to moving after college that’s a great idea!

As far as getting into my first property before leaving the service I’m not sure if it’s totally feasible seeing as how I only have a few months left and I will then be moving across the country. But I think house hacking is definitely the strategy I will be using. At least at first while I’m attending college.

Also the GI bill grants you a monthly housing allowance while attending college. It varies by area code how much you will get per month (in my case about $2,700) and I would hope that would help my ability to finance conventionally at first, as well as reinvesting the money from the GI bill into future investments.

@Will Barnard thanks Will! I was just actually reading about your business last week in the book on Investing in Real Estate with No and low Money Down.

I couldn’t agree with you more! I’m spending my time this year reading up on the subject, listening to the podcasts, and trying to network with other investors. Preferably if they’re more experienced than I am (since I have no experience at all)

Since I will be attending classes in the Fall of 2020, I was going to wait to analyze potential properties till about March of next year. And then sometime in July but my first property, move in, and prepare it for the coming school year in September.

Does this seem like a feasible plan or am I missing anything?

Originally posted by @Jeremy Bourgeois:

@Will Barnard thanks Will! I was just actually reading about your business last week in the book on Investing in Real Estate with No and low Money Down.

I couldn’t agree with you more! I’m spending my time this year reading up on the subject, listening to the podcasts, and trying to network with other investors. Preferably if they’re more experienced than I am (since I have no experience at all)

Since I will be attending classes in the Fall of 2020, I was going to wait to analyze potential properties till about March of next year. And then sometime in July but my first property, move in, and prepare it for the coming school year in September.

Does this seem like a feasible plan or am I missing anything?

 Plans are good, but in real estate, it does not always go as planned so keep that in mind. The most important thing is to get to know the area in which you will make your first purchase, know that market, best streets, worst streets, etc. Know costs associated with rehabs to get your property to best rentable pricing, and once you know all of this, start your search, don’t wait. It may take you longer and if not, you start earning sooner.

@Will Barnard thanks for the insight Will!

There’s a lot of pieces that I was missing it seems. Glad I came to the forums and asked about it. I’m sure that alone will save me a lot of time and headaches. Might as well get started now I suppose!