Hi BiggerPockets family! This is my first post so I am very excited and thankful to have the opportunity to pose my questions to such a wide audience.
As a little bit of background information, I am currently a senior at the University of Georgia, and am looking to get involved in real estate investing in the Athens/Metro Atlanta, Georgia area.
So my question is this; What advice would you give to someone who is in college, has very limited funds (around $3000) and is looking to get involved in the real estate world. Recently, I have been listening to a lot of podcasts, watching a lot of videos, and reading a lot of articles about wholesaling. It sounds very appealing to someone with limited funds such as myself, but there appears to be quite a high barrier to entry (that being competing with other wholesalers who already have very effective systems for finding distressed sellers).
I was wondering if anyone has any tips or tricks that someone in my unique position could use to help me get started. Also, I am extremely interested in networking with people in my area, and would love to hear from any local investors. Thanks in advance for your responses.
Step one is get a job. You generally want a solid W-2 income so you can convince banks and other financers to lend money to you. And, they aren't really going to consider your wholesale money as something that is stable.
In the alternative, you may want to consider negotiating seller-finance/lease-option deals. When I was in school, I negotiated a couple of those, although I closed on another kind. Without a solid job/W-2 income, you're going to have to rely on the good graces of the seller and your negotiating skills.
Be sure to exercise caution not to overleverage at this stage. The last thing you want is to rack up a debt, graduate school, not find a job, then have student loans come in and over-burden your financial posture.
Welcome @Brigham Bailey , I really like your post! My son is a senior in college and has about 5,000 and is also very interested in getting started with real estate. He too has been learning as much as he can, listening to podcast and reading books on this. At this time he is planning to house hack. Duplex, triplex or 4 plex as soon as he graduates and knows the area he will be working in. His plan is to move every 18 months or so, doing the same over and over again.
Best of luck!
@James Galla Hi James! Thanks for your response. I probably should have mentioned it in my original post, but I do luckily have a job lined up post-graduation. I will be working at the corporate headquarters of a large regional bank. And thanks for the suggestion regarding negotiating seller finance/lease option deals. I will certainly look into that!
@Brigham Bailey Welcome to the BP forums. I am straight to the point, so don't take it personally. You should focus on finishing school and building a career in your field of study, assuming it is a good field. You can invest using your new income until you become financially free. If you become a real estate investor instead, you would have basically wasted four years and tens of thousands of dollars on an education that you didn't need. You will need to start a new education on how to find, rehab, market, and manage real estate. Investing requires education, but not the institutional education that you have been doing. Starting out for you is the same as anyone else starting out. A steep learning curve and some mistakes will make you an overnight success in about 5-10 years.
@Diana Dorantes Thanks Diana! House hacking is at the top of my to-do list post-graduation! It does seem like a fantastic way to get started in real estate. I am looking forward to saving for that first property, and then expanding from there. Thanks again and good luck to your son!
@Anthony Dooley Thanks for your candor Anthony. I wouldn't want anything other than honest opinions. And as of right now, finishing school and starting my career in banking are definitely my highest priorities. I suppose that this interest in real estate mostly stems from some deeply ingrained entrepreneurial aspirations of mine. However, I do understand the financial limitations that come with being in college, so I can definitely appreciate what your saying regarding focusing on my school and career. Thanks for your response!
@Brigham Bailey get more money.
@Brigham Bailey invest in REIT's or real estate etfs/ mutual funds
Budget. Save as much money as you can monthly. Work on having a stable income. Pay your savings like it's another bill every single month religiously. Keep on educating yourself. Maybe find someone in your family or that you know personally who would be a good person to have as a mentor.
Don't get stuck in the rat race. Avoid heavy consumer debt, auto loans, credit card debt etc.
once you get some more saved up, you can house hack with a FHA loan. You can also try owner finance like others have said.
Great advice. In a taxable account then build the career and emergency fund.
@Brigham Bailey I’m at most a few years older than you. Here’s what I did and I recommend you do the same.
Step 1: get a job. (Sounds like you did that)
Step 2: save money and learn for the next 12-15 months
Step 3: buy a rental (if that’s what you want to do).
Repeat about 100 times.
@Brigham Bailey - I'll piggy back on the advice about W2 income being the best source for showing lenders you're a good risk. The only thing I'll add is in addition to saving for the down payment is to build a solid cash cushion. What gets REI in trouble is buying an investment property and using all their cash as a down payment. Having a solid cash cushion helps when there are bumps in the road with either your career or capital expenditures required by your rental property. My best to you.