Anyone begin their real estate journey in their late 40s?

190 Replies

@Patrick Froehlich   I started at age 41

The downside is that you don't have a long time to build wealth and capital.   On the positive side, you probably have a lot more business experience, life experiences and (hopefully) more financial resources than a 20-something.  These will allow you to move faster.

We were moving pretty slowly at first, buying about one single-family rental per year until we found a group that taught us the right way to buy property.  The next two years we bought 9 houses, making a lot more than we were before. Then we started investing passively in apartments with other members of that group.  (which we continue to do today)  Now we've also syndicated two apartment deals that we manage.  We retired my wife from a six-figure income last year and hope to do the same for me soon.  The past three years we've generated much more cash from our real estate than we have from our jobs.

Hi @Patrick Froehlich , I have a client who started early in their 50's.  I was very encouraged to see them stick to a "conservative" path and try to do the "Stack" that @Brandon Turner talks about:  1 house, then 2, then 4, then 8, and then 16.

Because of their patience, clear vision for what they wanted to accomplish, and the way they honor the people they work with they are about 12 months in and sitting on 6 instead of 1.  

A lot of the usefulness of real estate investing will change depending on your "drawdown horizon" moreso than age.  If you are 45, but want to work until you are 75 then you're looking at a full 30-year cycle during which you'd participate in the 4 levers of real estate investing.

If you are wanting to draw down on the investment in 3 years, then that's a different story, no matter if you are 20 or 60.  More distance between now and your drawdown horizon can mean that you focus on equity buildup, tax advantages, and other levers than cashflow.  Then, as you near the drawdown horizon you'd most likely want to shift this to be more cashflow heavy.

@Patrick Froehlich better late than never. Listen don't let age get in the way of making a good investment. I helped a lot of OOS investors that are just starting in their mid 50s expand here.

Most of them from California where it's too expensive for a 20% down payment on a home.

I have specifically helped one gentleman who is 57(either 56 or 57) get 3 rentals this year for only 30k invested. Producing a cashflow of little over 600 a month profit. (after expenses).

I'd love to discuss with you more your goals and how to work towards those goals.

@Patrick Froehlich

It's not yet too late to start investing. Although it is advisable to start investing at 20s, there's no such thing as too late in real estate. It's all about mindset. Just make sure to invest in your health because real estate is a long term investment.

Colonel Sanders fried his first piece of KFC chicken at age 62.  Get busy, young 'un!  (* said an almost 45-year-old!)

Joking aside, I think the main concerns middle age REIs face are:

1) Shorter time line from start to exit (if you plan to exit)

2) Less risk tolerance

Fortunately, you can manage both of those by what type of investments you make and how you structure them, as follows:

1) Avoid speculation.  No "hot market investing" that can tumble, taking you years to rebuild.

2) Leverage business knowledge from you and your network.  You should be able to avoid many mistakes typical 20-something newbies make in their rush to get wealthy in 3 years.

3) Do investment with timelines.  Rather than buy and hold while paying down a 30-year note, go for things that have a 5-7 year timeline, then swap into something else.

Age can be an asset to you.  You have not only a sense of urgency, but also hopefully the experience and patience to channel that into wise decisions.  Most young investors lack one or both of those characteristics.  Use them to your advantage.

I had my first place in my early 20s, but all of my other rentals were bought when I was in my 40s.  Let's face it, 40 is not that old.  By that point you have your career established and are earning good money.  You have savings you can use for investing and your income is higher meaning you can borrow more for mortgages.  Depending on when you plan to retire, your mortgages will be paid down by quite a bit.  You can either sell the rentals slowly or keep them.

I am in my mid 40's and have been investing here locally for 15 years. We are still acquiring properties. As long as the properties are cash flowing, it doesn't really matter how late you start. No doubt time is a huge advantage in real estate, but that is the case with any investing or any business. 

@Greg Scott

I’m 42, my wife and I bought our first rental 8 years ago and have paid it off since.

We’ve recently decided to take a more aggressive approach, using the resources that we’ve earned throughout our 30’s.

How would you recommend we go about finding mentorship and potential opportunities like buying groups/syndicates in the Seattle area?

I did! Bought my first flip at age 44 and remodeled the whole thing myself, except for a couple things I hired a contractor for. I've done about 1 a year for the last 5 years, doing almost everything myself. I need to hire out more, but really enjoy the process, so I haven't yet even though I'd probably make more $$ if I did

I "re-started" in my 40s after losing a big chunk of money in my late 20's. It can be done; it takes a little more aggressive approach depending on your goal. Although I could say I was building up to re-starting in my 30's because that's where I saved all the money I used to try again. 

I started at 48, full time, I took early retirement from the airline, I Cash my 401K, and purchased my flip for 25,000, I found an amazing real estate agent , he helped me connect with a bank That gives us loans and approletters, also I used my husband's 401K for a self directed investment IRA, which is very hard to manage for the restrictions. Now we have 3 duplexes in very prestigious areas, also a six-plex, 3 houses, 2 condos, we are In the process Of building a dental office , and 4 Studios condos, and I am purchasing a house in a million dollar avenue, this house will have an ADU in the garage. We had previously purchased 2 and 1/3 buildings in Bolivia, and 2 houses by the university of MN , I am a Bolivian woman with broken English, my husband is a son of a SD farmer, so is a Jack of all trades. You have to be tough in real estate and don't give up. I buy the houses.
MY husband is an amazing landlord and he does all of the bank and renter’s paperwork, we still own own buildings in Bolivia, we sold the houses by the university of Minnesota.  I also just purchased another house with my daughters.  You will love the business, to start get inspections or always add 30,000 in mechanicals in top of remodeling, to start buy easy homes that need minimal work, also try to go everyday to see your house, to make sure everything is running smoothly.  We have had many problems , and we never gave up , and we focus in buying our next house and enjoying the results of a flip. We also do 3 airbnb’s which now they are renting for 50 to 75 percent off due to Codvid19.  

We have flipped about 20 to 30 houses.

@Patrick Froehlich

I started late as well. Last daughter was a senior In high school and I was in my early 50's. I've done ok. My portfolio consists of a number of BRRRR projects, ranging from SFR, 2 units, 4 units, college rooming house and 10 flips. The goal was always to replace my income and create generational wealth. I will be there when I'm ready to hang up my corporate job. I self manage my properties.

I approached REI like any project. It's all about the math and opportunity cost. Educate yourself so you know a good opportunity when it presents itself. It definitely takes patience and the ability to handle challenges and problems. Late 40's your young in my mind.

@Lola Brown @Colt Winkie   The group I joined is called Lifestyles Unlimited.  Following their best practices greatly improved my real estate investing returns, and as a result completely changed my life.

When I joined they only operated out of Texas and my wife and I would fly down to Dallas or Houston to attend their classes. They've been around for 30 years and are no fly-by-night guru program.  They have large physical offices in 3 Texas cities plus Phoenix and 50,000 members globally.  A few years ago they decided to expand out of Texas so now do events throughout the country plus have a huge amount of online learning.  No matter where you live, they can help you.  If you call, you can usually get a discount on their base membership which is for 1 year, and a great value.

They offer free workshops that are a good example of the returns people can get following their practices.  Watch one, or two, or three. There are different members each week that are highlighted. https://freeworkshoplivestream...

@Patrick Froehlich

I started at age 47 (I am 50 now). It is never too late. One of my clients and father of a friend didn't start until he was 58. He is 72 now and owns several SFR's and condo's (at the beach) free and clear and had invested passively in 3 of my syndications. I say if you are interested in it then do it and figure it out!

Even if you have ONE rental house - you move out of the house you own now and keep it as a rental, and find some other less expensive (or smaller or whatever, better somehow) place to live, and it cash flows a couple hundred bucks is all -- then you are still MARGINALLY better off in retirement than you would have been.  

A couple hundred bucks of cashflow now might be $500 of cashflow (or more) when you retire.  Heck that one house might be paid off by then, or close to it.  Again, this might not keep you from having to work in retirement, but maybe you'll get a day off here and there - or put you in a position so that you will be able to afford your meds.

So why not do what you can?  Maybe you don't get invited onto the podcast to talk to Brandon and David about how you crushed it --- all that matters is that you are in a better spot that you would have been.  And who knows, look what all these other people in this very thread have managed to do!!

I am also a very late starter, and my first deal was a flip that set me back.  Still not giving up.  I'm just not.

Originally posted by @Colt Winkie :

@Greg Scott

I’m 42, my wife and I bought our first rental 8 years ago and have paid it off since.

We’ve recently decided to take a more aggressive approach, using the resources that we’ve earned throughout our 30’s.

How would you recommend we go about finding mentorship and potential opportunities like buying groups/syndicates in the Seattle area?

One guy I have been watching lately online is Ken McElroy - he is originally from Seattle now based in Scottsdale and invests in MF all over the country. Lots of free resources on his YT channel.  He talks about he structures his deals, etc.  Not sure about mentorship - I don't think you need that, anyway.  Go network with other people doing what it is you want to do, AND go make friends with some lenders in your area.  Get to know the people they already know and you are on your way.

@Patrick Froehlich

I was 40-something when I jumped into multifamily. I had owned a handful or single family rentals since I was 30-something. I found that I had to rebrand myself as “the apartment guy” instead of my current profession as “The Marine” — but as mentioned, most people in their forties have more real experience, capital, and know other people with capital.

I guess it took me until I turned forty to realize that I wasn’t getting younger and retirement was closer than I imagined.

@Andy Vaughan you’re 50!!! Never would have guessed!!

I started at 48. I was honestly hoping to just add a few hundred dollars a month of additional income. I did spend about 10 years in the Marine Corps and have about 20 years in the corporate world since leaving. I found that after I bought my first property, a duplex, that it was something I was really interested in and started reading about every book possible to get a better handle on things. I now have 107 doors and it seems to be getting easier. I've used seller financing, private money, hard money, and bank loans. I've never done a flip. I did have about 70k of capital to start with that I had put away and really just wanted to do something besides the stock market. I can say that I've had one mistake that really stressed me out because I didn't have enough cap ex put away. I've since corrected that problem. I had a flooding issue and it cost about 20k to fix it. Outside of that, most things have went pretty well by just making sure that I had a decent deal. 

Bigger pockets has really helped me with evaluating the properties. There have also been a member or two that have privately helped me to avoid bigger mistakes. I don't see age as being a hindrance as long as you are willing to study and put time in to catch up.