17 years old, I have about 28,000 cash on hand, What do I do?

[Nicholas Stevenson]

Hello, my name is Nicholas,

Ive been interested in real estate investing for a while now, I've been wanting to become a real estate agent since I was 15. I graduated High school a year early, so I can focus more on reading books and learning about real estate investing. Im getting close to being 18 now in the spring, and I have saved up 28,000 in total, I worked a local fast food for 8 months and recently quit. As well as some other business ventures, I am currently unemployed, trying to get a job in a real estate type of environment so I can gain some more experience. As well as have a good work history for the banks. I don't know if thats possible because I am only 17, but the question I have is what I should do with the money I currently have.

Do I use it to get a duplex or a quadplex? (Using FHA)

Do the BRRRR Method on a property and recycle?

Ive thought about going into wholesaling recently, and I know there are other opportunities out there to do with real estate investing, but I don't know what the best course of action is. the market is kind of in a weird state right now, and I'm thinking about waiting 12-18 months before buying anything. Im still new to the game so I don't have experience under my belt. Any advice like what you would do in my situation would be greatly appreciated, Im just a kid looking to learn and do well in the real estate investing world.

P.S. If you know any jobs I can get started with in real estate as a 17 year old that would be greatly appreciated as well.

Thanks!

-Nicholas

[John B.]

Id say triplex or fourplex with FHA and house hack.

[Michael Brattelli]

@Nicholas Stevenson turn 18. Get your real estate license. Learn as much as you can and work your *** off. By 21 you should know your market and be able to spot a great deal when it comes up and be qualified by then. Purchase a quad with an fha loan and you’re off to a great start.

[Shafi Noss]

It sounds like you are doing great setting the groundwork for yourself. Here are a few thoughts that might be useful. 

There are three ways to engage with real estate. You can be a passive investor where you have capital and decide where to put it, an active investors where you put effort into putting together and executing deals like wholesalers flippers and developers, or a service provider where you provide a professional service like a loan officer, appraiser, lawyer, RE agent etc. The lines between these roles are not perfectly sharp but this might be a useful way to orient yourself on how you want to do real estate. It sounds to me like you are most interested in active investing.

Active real estate investing has an apprenticeship model, where you can get a helping hand from people by showing up and working hard. When people see that they love it and it sounds like you are doing that already. If you start engaging with people you may eventually get a lucky day and find your first foothold. 

[Bruce Woodruff]

Wait. Save more money and learn everything you can about RE and construction. You'll know when the time is right....

[Joe Norman]

How far will $28k go in your market? If you can use that to buy a multi-unit (4-plex or less) and house hack then I think thats a great way to start off. Good luck!

[Conner Olsen]

Quote from @Nicholas Stevenson:

Hello, my name is Nicholas,

Ive been interested in real estate investing for a while now, I've been wanting to become a real estate agent since I was 15. I graduated High school a year early, so I can focus more on reading books and learning about real estate investing. Im getting close to being 18 now in the spring, and I have saved up 28,000 in total, I worked a local fast food for 8 months and recently quit. As well as some other business ventures, I am currently unemployed, trying to get a job in a real estate type of environment so I can gain some more experience. As well as have a good work history for the banks. I don't know if thats possible because I am only 17, but the question I have is what I should do with the money I currently have.

Do I use it to get a duplex or a quadplex? (Using FHA)

Do the BRRRR Method on a property and recycle?

Ive thought about going into wholesaling recently, and I know there are other opportunities out there to do with real estate investing, but I don't know what the best course of action is. the market is kind of in a weird state right now, and I'm thinking about waiting 12-18 months before buying anything. Im still new to the game so I don't have experience under my belt. Any advice like what you would do in my situation would be greatly appreciated, Im just a kid looking to learn and do well in the real estate investing world.

P.S. If you know any jobs I can get started with in real estate as a 17 year old that would be greatly appreciated as well.

Thanks!

-Nicholas

I recommend you House hack, join some investment groups, pay for courses, buy some books, intern/apprentice in a real estate related career and use the cash to float you while you don’t have a paycheck.

[Maksu Ize]

28k at 17, very impressive.

Wait 1-2 years until interest rates peak, then buy. There's going to be DEALS if rates keep hiking the way they are.

[Khalid Bryan]

Hey Nicholas! Personally I'd keep saving and consider becoming a Realtor. Great way to learn the inner-workings while making money along the way. it sounds like you would be dedicated and hard working enough to do well. You can still invest while holding the license and you can also decide to go for another field while holding a license. I don't think it would hurt to try either way as it can be under $2k to get started  I'm a broker in South Florida. I started at age 21.

[Jacob Graves]

I would work with a contractor and learn some trades at a surface/detailed level if you choose. You will need a job to qualify for any of the loans you want to get anyhow. I agree with above stack your cash until your 21 and have a better understanding/experience under your belt. Congrats on the hard work thus far, this is just the beginning.  

[Devin James]

Hey Nicholas, 

I recommend house hacking. It's a great way to get started in this business. 

I also recommend that you start cold-calling the multi-family owners in the area you want to house-hack. This way, you will learn to communicate with potential sellers and get used to having those conversations. & the cold calling could lead to a potential wholesale opportunity.

[Sasha Mohammed]

first of all, Kudos! you've done a great job setting yourself up to this point! 

a lot of these posts say to wait, but i think as of right now, at 17, i would suggest you start looking for a job in the field. Many realtors or loan officers would want to take on a junior -- someone they can teach and share knowledge with, who don't already have bad habits to unlearn. you might find yourself working for "free" just to gain experience and knowledge in the inner workings of the industry, but if you happen to be fortunate to have a roof over your head, no spouse and kids... this is a period of time you may never get back. its a real opportunity that most people who start later in life can't tap into. check local job postings for anything in the industry that could get you a leg up learning the inner-workings. Processing for a loan officer or broker, Transaction coordinator for a realtor, even something in title or escrow will give you experience looking over other people's transactions and learning alongside other industry pros. 

...and then when it is time to buy, whenever that comes, you'll have a leg up over many others, even some twice or 3x your age. 

Best of luck! 

[John Mathew]

Wow! Hats off Nicholas.

I would suggest that you look for a Real Estate Mentor

Before many successful real estate agents came successful mentors. Real estate is an industry where finding a great mentor can really slingshot a career. You can not only get to learn the ropes, but You can also get to practice the habits of success, draw on years of experience, make new connections, maybe get a referral or two, and witness the power of a great real estate company culture once you grow older. 

Good luck on your real estate endeavors!

[Jacob Lapp]

@Nicholas Stevenson

Awesome work man!

I was in a similar position at 20. Working in the pipeline industry but got my real estate license on the side to save on commissions and side cash helping friends buy. I was hyper focused on 4-units. I ended up getting a great triplex instead first time home buyer conventional loan 5% down. Then a duplex owner occupied 15% conventional Then another duplex 15% conventional then another triplex 10% down FHA 203k (massive rehab).

House hacking each one each year. And have a 10 unit portfolio now once this rehabs complete total Cashflow will be around $7500 monthly from 220k invested over the last 3 years. Portfolio currently worth about 1.6M and 1.1M of good debt.

All while working a W-2 job using my RE license a few times a year.

This isn’t to brag just some hope and to let you know that it doesn’t matter if it’s a duplex or quad.

I'd save your FHA loan for a larger property a lot of people use it on the first one so they can afford it but then wish they had it later.

I never refinanced. The BRRR method works great if you have the cash to do the full rehab to get the equity you want unless you really get a great deal. Private money or hard money at this point in your investing career should be off the table. You want to build a credibility binder. Have a couple good househacks under your belt and get the basics down before you start risking other people's money. (I might just be projecting my own insecurities on you) I haven't used anyone else's money or partnered yet and am almost at the point where I'd consider it.

Time is your most valuable asset now. Focus on grinding and making money. Learning and developing relationships. Get your license and buy your first multi family ASAP! Keep us posted!

[Ricardo Hidalgo]

Quote from @Nicholas Stevenson:

Hello, my name is Nicholas,

Ive been interested in real estate investing for a while now, I've been wanting to become a real estate agent since I was 15. I graduated High school a year early, so I can focus more on reading books and learning about real estate investing. Im getting close to being 18 now in the spring, and I have saved up 28,000 in total, I worked a local fast food for 8 months and recently quit. As well as some other business ventures, I am currently unemployed, trying to get a job in a real estate type of environment so I can gain some more experience. As well as have a good work history for the banks. I don't know if thats possible because I am only 17, but the question I have is what I should do with the money I currently have.

Do I use it to get a duplex or a quadplex? (Using FHA)

Do the BRRRR Method on a property and recycle?

Ive thought about going into wholesaling recently, and I know there are other opportunities out there to do with real estate investing, but I don't know what the best course of action is. the market is kind of in a weird state right now, and I'm thinking about waiting 12-18 months before buying anything. Im still new to the game so I don't have experience under my belt. Any advice like what you would do in my situation would be greatly appreciated, Im just a kid looking to learn and do well in the real estate investing world.

P.S. If you know any jobs I can get started with in real estate as a 17 year old that would be greatly appreciated as well.

Thanks!

-Nicholas

I would invest the money back into yourself or look to create a business to learn the ins and out. When I first got into real estate, I focused on building out my team, systems and processes to scale quickly for the first few years. Now we have the luxury of excess profits that can be use to acquire multiple properties and leverage several LLC's. This allows us to redistribute debts, collateral equities and have large business lines of credit to buy or flip more properties with little capital and better rates.

[Eliott Elias]

Start building a portfolio early. Put down payments on 5 properties and increase your net worth. Your 30 year old self will thank you

[Leo R.]

@Nicholas Stevenson congrats on saving the money!

Before you do anything, it's advisable to study up, get experience, and learn as much as you possibly can about RE. Fortunately, there are innumerable ways to learn--listen to BP podcasts, read books, watch youtube videos, do an apprenticeship with a RE investor, work as a carpenter's apprentice, go to REIA meetings, etc., etc. Spend a couple years immersed in RE before making any big decisions with your money or your commitments (luckily, since you're young, time is on your side to learn all this stuff).

Once you've spent some significant time learning (both via RE media, and via actual field experience like an apprenticeship), then you'll be in a much better position to decide what to do with your time and money.

As others have mentioned, if your goal is to actually own profitable real estate, then house hacking a single fam or small multi fam property is a great way to get started. Generally, I'd say that house hacking is a much better way to start than BRRR'ing, flipping, or certainly wholesaling.

Why? Because, house hacking is comparatively simple and beginner-friendly (and therefore has the highest likelihood of success), but strategies like BRRR'ing, flipping, wholesaling, etc. are far more complicated, and have a far higher chance of failure because they involve so many "moving pieces". 

Since you're from SLC, you'll like this analogy: would you tell a beginner skier who has zero experience to ski a double black diamond for their first run? (obviously, no). Beginners should start off on beginner terrain, where they actually have a chance to learn and succeed. A house hack is like that green circle beginner run (but wholesaling is like the double black diamond). 

With a house hack, you can make money while learning many of the essential skills you'll need to succeed in RE investing (e.g.; how to analyze properties, how to engage in a strong due diligence process, how to screen tenants, how to manage the property, how to build a network of contractors, plumbers, electricians and other pros, how to manage the book keeping of the property, etc., etc., etc.  If you want to succeed in RE investing, getting this experience will be critical). So, you can make money and learn invaluable lessons with a HH, but it's typically a much lower risk strategy than BRRR'ing, flipping or wholesaling--which are strategies that (when executed poorly) can easily bankrupt a beginner.

Moreover, house hacking can be very lucrative, and there are multi-millionaires who built their fortunes on repetitive house hacking.

Now, having said all that, house hacking isn't necessarily easy (if it were, everyone would do it)...it's just easier than the more advanced strategies...House hacking still takes significant due diligence, skill in analyzing the market and the property, time and effort to learn about tenant screening and property management, the ability to anticipate appreciation/depreciation trends, etc., etc., etc....and even with lots of skill and preparation, things will still go wrong (vacancy, plumbing leaks, bad tenants, etc.)--but that's the nature of the game. As James Brown sang: you gotta pay the cost to be the boss.

Good luck out there!

[Nicholas Stevenson]

Thank you for everyone who chimed in! This was amazing and super helpful, Im thankful for everyone who put in the effort to reply, It means alot to me, Ive taken all your advice deeply and keep looking back over them as I continue to learn and improve my knowledge. Again thank you all it means the world to me

-Thanks!

-Nicholas