20 Yrs old getting into real estate! Any Advise?

Question

Hello BP Community,

I am currently 20 years old, still in college studying business management but have had an interest in real estate for several years now. I have been following BP for a while and been invested in Youtube videos about all the different aspects of real estate. I currently live in Chicago, IL but in the next 5+ years would like to more somewhere in Texas (Maybe around Dallas). I have been watching every penny I spend and saving everything in order to invest when I have enough. I just would like to hear/learn from experienced investors!!. For the past couple of weeks, I have been analyzing properties using BP calculators and trying to best understand the Texas market. If anyone would be kind enough to share some tips for a newbie and how to best manage money (House hacking?) or getting into my first deal and growing exponentially not linearly it would be greatly appreciated. This community is awesome and full of such intelligent people, I wish I could shadow everyone!

Thanks!

Jaron Walling · Answer

@Justin Triplett Welcome to the community! I would continue doing what you're doing now and learn as much as possible while saving for the first deal. When the day comes and you decide to move to Texas you'll be prepared!

In the investing world it's important to take controlled steps. Step 1: Be debt free (at least close) and have an emergency fund. Step 2: Be smart with your money and don't buy stupid s**t (I made this mistake for years after college). Step 3: Be educated and know what a GOOD DEAL looks like. It's not smart to jump into a market without knowing the numbers or having a exit strategy. Texas is more expensive than other markets. The cities are huge. I would narrow down to various neighborhoods and focus on deals in them. Don't buy a property just to buy something. That's how you become a retail buyer.

Justin Triplett · Answer

I just want to share from the bottom of my heart how grateful I am for such wonderful people taking time out of their day to help me out! I know I am young but I am hungry to keep learning about real estate investing. I'm 1000% more interested in this than anything I'm learning in school. The BP community is honestly so amazing! I really would like to go network with people and attend meetups (which I'm actively searching for). I have been watching Dave Ramsey for some time now and understand how to become financially free and how to be smart with your money. At my current job, I am trying to soak up as much knowledge as I can from my bosses to have that information for the future.

When I graduate next year, I'll walk out of college with no debt and about 15k in the savings. What are the first steps I should do in order to get into investing?

Thank you, everyone, for posting on my forum!

Nicole Heasley Beitenman · Answer

1) Treat BP like a college course. I recommend listening to 1 podcast a day, 1 blog post a day, and spending ~15 minutes a day on the forums

2) Network at your local meetup! If you don't have one near you, start one. I just started my own and can't promote the idea enough.

3) DEFINITELY house hack! And don't think you have to buy a MFH to do it. I hacked a SFH for 3 years. Go where the numbers lead you.

Good luck!!

Bob B. · Answer

@Justin Triplett  It's great that you are pursuing a marketable degree.

Jaron is correct.  Stay away from personal debt, keep saving money, live below your means.  Read Dave Ramsey.  Your friends will laugh at you for your frugal lifestyle but while you will be a landlord they'll be tenants.  Hang around like minded people.

I would suggest that you learn a trade.  You don't have to master it.  Plumbing, electrical, carpentry, anything construction related will help with your overall assessment of rehabbing.  Take your time, it's a marathon not a sprint.  Don't look at the super stars here for a benchmark.  They aren't the norm.  Not to say you shouldn't hope to get there.

Sounds like you have a good start.

Good Luck

James Wise · Answer

Two things I did as a young dude that really helped my career.

• Bought a cheap house with an FHA loan.
• Got my real estate sales license.

Daniel Haberkost · Answer

Hey Justin, that's awesome that you've been working in the industry for several years already, understanding how to properly screen tenants/manage properties is a huge component of owning rentals. Are you working full time? If you are and have decent credit you should be able to start with a house-hack. I bought my first rental at 21 this way and it's been a great strategy!

Are you getting out to local RE meetups? Building your network is invaluable and you'll find that there aren't many young people actually doing anything in RE so often times experienced investors will be enthusiastic about helping someone your age.

Scott Mac · Answer

Hi Justin,

That goal is great (hang on to it), but you need a NOW goal. Such as buy a X hold it for X and either keep it, sell it when X happens, or refinance it when X happens.

Research what 1031 Exchange is, and understand it completely, and hoard as much cash as you can. Cash is King.

Dallas is HUGE. It has many counties with different demographics in different areas of the Metroplex.

To get to know it better, understand the neighborhoods in the Metroplex and where they are on the map, and then when you find some areas that interest you--fly down, rent a small car (and a cheap motel room in the area you are visiting) and drive the area during the day and around 9:30 pm or so (nothing beats boots on the ground).

Beware of high crime areas--be safe.

Good Luck!

John Westbrook · Answer

Hi @Justin Triplett!  Congrats on looking ahead and seeing your path.  I live in Chicago and have a similar background as you, I worked for a big mgmt company in Chicago leasing/managing buildings.  When I was 24 when I started investing in multis.  I would suggest you soak in as much knowledge of your current company and start asking questions to your bosses beyond your scope of work.  You have to think...the owners of the company you work for probably are currently at or around the 50mil/50yrs old goal you set for yourself.  Real estate in Chicago will be pretty much the same as Real Estate in Texas so learn as much as you can in your current role and leverage that knowledge to show lenders/future investors/partners why you are a good operator.  When you go 5+ unit commercial lending, they care more about your ability to manage a asset then your yearly income or age.  If you ever want to pick my brain/see projects, I live and invest in Ukrainian Village/East Humboldt Park here in Chicago.  Cheers!

-JW

Justin Triplett · Answer

I would also like to say that for 2.5 Years have been working at an apartment complex as a leasing agent. I understand most of the due diligence of acquiring new tenants, how to manage and how to keep tenants happy. Anyone interested in taking me under there wing would be greatly appreciated. I have made a goal to make 50 Million by the time I'm 50 yrs old! (but i hope sooner)

Daniel Smyth · Answer

Advice? Well, the best advice was already given, as you are here on BP with a questioning attitude!You are actually doing this at a very good time. As markets flux, and they will, you are in a good place as you learn the ropes. Watch and learn! Make your connections and get that free work done. An investment of anything is a gamble. Gamble with what you can stand to lose or do with less of.For most of us, time is abundant. Managing that abundant time better, gets more out of that time.I learn best by doing. Some are different. When you can, jump in the pool and test the water.A little caution with that water, as unless you have a good idea what's under that surface, going head first is not the choice I would make.Just don't expect to get in the water and jump out clean and dry the first time. This can be done, but it's rarely done well at first.Good luck and fortune to you!

20 Yrs old getting into real estate! Any Advise?

Most Popular Reply