Im 19 years old with $160k. How do I invest?

Buying & Selling Real Estate
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Im 19 years old with $160k. How do I invest?

Gregory L.
TX · Member since 2018 · 11 posts · 2 votes
As i said I’m 19 and have $160k, I just sold a business and am starting up another business soon not related to real estate, but i also want to get into the real estate industry. I want to invest in multi-family, specifically mobile home parks, RV parks that i could turn into mobile home parks, storage units, and apartments, ive also looked into billboards but I know its extremely competitive and difficult. Single family is not appealing to me at all, I’ve found a mobile home & RV park near me that looks like a good deal and i have all of the data on it from coserv, but I need to speak to the owner because it seems like a ridiculously low price. I’ve listened to BP Podcast for close to a year and REI is what I want to do next, gotta start early though, right? I am going to start a holding company specifically for real estate, not exactly sure what type of RE to invest in, if I should seek partnership and go for a bigger deal, where could I learn the most about investing specifically in multi-family, any books I can read to expand my knowledge on the subject, any specific BP Podcast episodes that could enhance my abilities as well. Open to all feedback and all advice, I will stay as active as I can on this thread, thank you for all the advice before hand 😃
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Nick BennettPro Member
Mashpee, MA · Member since 2018 · 56 posts · 21 votes
7y

Hi Greg!

Congrats on your success thus far! I'm sure it has not been easy.

This post struck me as I just finished reading about 5 months ago a book which said something to the effect of- "If you come to me and ask me how to invest 500k I'll tell you to go invest in yourself first"

Real-estate isn't as simple as dropping cash in a bucket and watching it grow, it's very intricate. It first comes with an understanding of what you are looking to achieve, then you search for the how, then you educate yourself on the how.

I recommend taking the 160k, take 158 of it and sit on it. Take 2K buy all the books and audio books you can along with some food and water, lock yourself in a room for 2 months, educate yourself and pick a direction. (Not kidding) 

The biggerpockets education section has a number of good books. If you haven't read Rich Dad Poor Dad- start there. From there I recommend The Slight Edge. From there get in to the real-estate books.

I wish someone said this to me, I hope this helps!

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  • Nick BennettPro Member
    Mashpee, MA · Member since 2018 · 56 posts · 21 votes
    7y

    Hi Greg!

    Congrats on your success thus far! I'm sure it has not been easy.

    This post struck me as I just finished reading about 5 months ago a book which said something to the effect of- "If you come to me and ask me how to invest 500k I'll tell you to go invest in yourself first"

    Real-estate isn't as simple as dropping cash in a bucket and watching it grow, it's very intricate. It first comes with an understanding of what you are looking to achieve, then you search for the how, then you educate yourself on the how.

    I recommend taking the 160k, take 158 of it and sit on it. Take 2K buy all the books and audio books you can along with some food and water, lock yourself in a room for 2 months, educate yourself and pick a direction. (Not kidding) 

    The biggerpockets education section has a number of good books. If you haven't read Rich Dad Poor Dad- start there. From there I recommend The Slight Edge. From there get in to the real-estate books.

    I wish someone said this to me, I hope this helps!

    8Reply
  • Frank Geiger
    Rental Property Investor · NC · Member since 2018 · 776 posts · 776 votes
    7y

    Congrats on having a successful business at 19!

    I know you don't want SFH or maybe even small MFH. But many investors overlook small details during their first few deals that can be costly mistakes. Better to start small then buy a big apartment building and lose it all.

    Unless you can partner with someone who has experience with commercial properties on a bigger deal. 

    0Reply
  • Account Closed
    Member since 2018 · 175 posts · 103 votes
    7y

    It's really VERY simple. Learn how to analyze a multi-family. Then go find one that meets your criteria and buy it with as little out of pocket as possible. Repeat. Or Go find the biggest one you can and do the same.

    Keep sufficient reserves. With that money, you can probably buy a 500K to 1,000,000 in MF. In the right market, this will get you 15-20 units. Save up do it again.

    0Reply
  • Mike Eigenmann
    Minneapolis, MN · Member since 2018 · 5 posts · 3 votes
    7y

    Hi Gregory - welcome to BP and congrats on your success. Personal finance is always very personal so take everyone's advice with a grain of salt. For me, the key to asset allocation is alignment with my goals in life (my "Big Rocks") - check out 7 Habits of Highly Effective People, changed my life 3 years ago. 

    I've thought about the same ideas you pose in your question - some fantastic BP Podcast Episodes that relate are:

    #9 - Using Hard Money Lenders to Grow Your Business with Ann Bellamy - this one could be interesting for you because you could be the money side of a deal

    #28 - Note Investing and Raising Private Money with Dave Van Horn - If you sold a business at 19, you must be money savvy so check out note investing

    #138 - Self Storage, Systems, and SEO with Michael Rogers - Self Storage can provide very attractive potential depending on your geographic region...something I'm looking into myself

    If you find decision making & behavioral psychology interesting, some books I highly recommend are:

    The Power of Habit - Charles Duhigg

    Influence: The Psychology of Persuasion - Robert Cialdini

    Logic of Failure - Dietrich Dörner

    Let me know how things go and good luck

    Mike

    2Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    If you are serious about MHC investing take yourself over to the MHU web site. Plenty of intensive training available in advance of investing.

    1Reply
  • Ed Emmons
    Specialist · Milford, ME · Member since 2016 · 630 posts · 378 votes
    7y

    I agree with @Nick Bennett to a point. Pretend you don’t have that much to invest or at least be very cautious. At your age it would be best to find an experienced partner unless you are going to start small and put little at risk. You will learn so much from doing a couple small deals that you can’t get from books and podcasts. Although I strongly support self education. To one point in your post, it is very difficult and expensive to convert an RV park to a mobile home park as the infrastructure is different.

    0Reply
  • Ronak Shah
    Northern NJ · Member since 2018 · 128 posts · 39 votes
    7y

    @Gregory L. First of all congrats on getting that much from business that you sold by 19 years of age!  I believe at this age, you should concentrate on The One Thing that made you successful and that will magnify your success!  You can always partner with someone experienced in RE if you want to start investing for passive income.  If you don’t want to get distracted by that either than use fundrise or other crowdfunding platforms and let them manage your money (granted it will be lower return but it will free up your time).

    2Reply
  • Alina Trigub
    Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
    7y

    @Gregory L.  
    Congrats on starting young and on your current successes. You mentioned that you want to do MHP investing and to start another business. My strong recommendation is to do one thing at a time. If you want to invest in MHP, educate yourself first PRIOR to taking any action. If you don't have the time to be active investor and want to start your other business first, then invest passively. While it also requires education - note investing, syndications, etc... - it will take significantly less of your time to invest once you're educated and ready to take action. 

    Best of luck!

    3Reply
  • John FortesPro Member
    Multi-Family Syndicator · Abington, MA · Member since 2017 · 603 posts · 347 votes
    7y

    Welcome and congrats on already starting and selling a business. Pretty impressive for someone your age. Love the energy. 

    As far as books, I'm sure others will recommend some but also you will find them as well as you discover your niche. 

    Steps to take that will help you.

    1. Educate yourself! This is going to be what you do for the rest of your life as you constantly tweak and insert what you learned into action.

    2. Analyze as many deals as possible. Keep reviewing and learning how to spot a good deal from a bad deal.

    3. Connect with like minded people.

    4. Talk about real estate! Be vocal and intentional with your conversations. You never know who is interested and needs help. Since you have educated yourself and analyzed deals, great chance to partner with a money partner on that front.

    5. Raise money for your own deals.

    6. Find deals for others. Also known as bird dogging.

    7. Invest in someone else's deal or syndication. Learn from the process and get involved someway, somehow. This allows you to earn while you learn by investing passively in their deal.

    8. Find a mentor and volunteer to help them for free. Add value to someone else for free education and building a friendship/relationship.

    9. Write a blog, start a podcast, start a YouTube channel, or do all 3.

    10. Be active on your social media platforms and create your own brand.

    These are not step by step processes. Just guidelines to help you get to your end goal. 1, 2, and 3 are crucial but everything else, tackle it in your own way and process. Just do it which i'm sure you will have no problem doing. Hope this helps, good luck, and God bless!

    0Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @Nick Bennett Tthank you for the reccomendations, I read a lot, My college has a ton of books so i don’t actually buy the books. Rich Dad Poor Dad was a good book on Why to invest, I read that my Junior year of high school and it got me into that mindset that theres more for me as long as I put it in the work. I will take your advice and continue reading and learning, thank you, Nick!
    0Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @Frank Geiger I will take this into consideration, I think a good idea is to find a partner, thank you, Frank!
    0Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @Erik M. Great idea, Erik, thank you for the feedback
    0Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @Mike Eigenmann Thank you for the feedback, Mike! I just finished the 7 Habits a few weeks ago and I just checked out Influence, I’ve heard it’s a great book, I will read the other 2, and I will listen to those podcasts this week, Thank you again for the recommendations if you have any more I would appreciate it greatly!
    0Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @Thomas S. Thank you for the advice, Thomas! I will look into the site
    0Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @Ed Emmons Okay, I’m gonna commit to learning until I’m ready but I agree with you 100% on learning from doing, that is the most effective way I have learned to do anything. I will do some research on converting RV Parks, I might have to wait until I get another solid income but I had no idea it was expensive. Thank you very much, Ed!
    0Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @Ronak Shah Thak you, I have considered searching for a partner but now that you said it I will look into it more extensively, thats a good idea, thank you, Ronak
    0Reply
  • Account Closed
    Rental Property Investor · Birmingham, MI · Member since 2016 · 60 posts · 71 votes
    7y

    Start with the basics... Add a profile pic and bio so we all know who's money we're spending. JK but seriously tho. 

    1Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @Douglas Christensen Say less, I’ll need a professional thouugh soon!
    0Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @John Fortes Thank you for all the information, John! I agree witth everything you said, learning is the most important component for just about anything, I will do some research about everything that you mentioned, and I love your attitude too, thank you!
    1Reply
  • Account Closed
    Rental Property Investor · Birmingham, MI · Member since 2016 · 60 posts · 71 votes
    7y

    @Gregory L. Go to at least three local REI meet ups and feel them out, plenty of professionals in those circles. I'd tell folks you only have $60k though until your are right at the finish line of signing up to be their partner. Too many smooth talkers out there.

    2Reply
  • Brian Ploszay
    Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    7y

    Ideally, go to school and not invest that money into real estate at such a young age.  If I were to mentor someone, I'd say go work for a developer / property management firm / Developer / Real estate broker assistant to get some experience first.

    0Reply
  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    7y

    @Gregory L. Nobody has mentioned this idea yet so here goes: but yourself a primary residence. I always wished I had the means to buy myself a house during my college years instead of renting. Part of this is because my college town had ridiculous appreciation. I would have doubled my money during the 5 years I lived there, instead of spending $30k on rent. This may or may not be the case for you regarding appreciation, probably not, but at the very least you can rent rooms to friends and make money instead of renting/living in the dorms (barf). Buying a primary is most people’s starting point, and probably makes more sense than buying a mobile home park that is priced too good to be true (major red flag in a high risk sector of real estate). As a homeowner you’ll get to learn all about the joys of taking care of a property and managing a college rental at the same time lol. Depending on what town you’re in, you might be able to just pay cash (but I wouldn’t spend any more than maybe $120k so you have adequate reserves especially considering you may not have steady income), or perhaps your parents would co-sign on a loan. Not enough info in your post to know if any of this actually makes sense for you or not, obviously you’d want to be sure the area has appreciation potential, and maybe you’re not even planning on staying at that school 4 years in which case don’t buy, but just a thought as it’s something I would do myself if I could go back in time and had that money at 19. Finally, whatever you did with your first business, do that again as many times as possible, sounds like that’s a much better gig than real estate!

    1Reply
  • Belinda Lopez
    Specialist · Houston, TX · Member since 2012 · 579 posts · 301 votes
    7y

    Congratulations! RV & Mobile Home Parks are my niche so I'm biased in this area. I think they are the great ROI of any real estate niche and TX is THE place to do it.

    We have a local REIA and when we asked our most experienced investors if they only had $500 to start over, what would they do? They all said invest in Education! Sounds like you already have been doing that so nice job. You'll soon discover that the learning never ends and the more you know, the better edge you have in this game. I also highly recommend the Mobile Home Bootcamp; find a partner and go.

    I'm in the process of buying a large RV Park and looking at a few others.  Finding a MHP at a decent price seems like a needle in the haystack these days so we are considering developing one. Be happy to connect with you on more specifics.

    0Reply
  • Gregory L.
    OP
    TX · Member since 2018 · 11 posts · 2 votes
    7y
    @Belinda Lopez I’ll take a look into the Mobile home bootcamp, I have a business partner for my next company and the next move is real estate so we’re both interested. I’ll message you
    0Reply
  • Elijah Vo
    Investor · Fort Worth, TX · Member since 2014 · 59 posts · 51 votes
    7y

    Hi Gregory, like everyone else I wanted to say good job and welcome to REI!

    About 2yrs ago, I transitioned into multifamily with the first year of that purely education...so, I dig what you and everyone on this post is saying about your education.  It looks like you've spent a year educating (and you already have the ambition), so it looks like you're on the edge of committing yourself...awesome!  Education is an ongoing process...however, you'll never have 100% of the information, so don't over educate.  Trust your numbers and your gut and jump in!

    Anyways, in the last 12mos I've closed a 114 unit apartment complex and I'm under contract for another 212, which should close at the end of Feb, early Mar.  There are tons of lessons and tips/tricks that I could write all day about, but one of the biggest factors that helped me was joining an investing/mentoring group called Think Multifamily, which is ran by Mark and Tamiel Kenney out of Dallas, TX. 

    I like what others have said about finding REI groups, Meetups, etc. to surround yourself with like-minded people. This has been key to help me bounce ideas, overcome obstacles, and hold me accountable. Anyhow, if you want some insight into the MF space, how I started, how I structured the deals, etc. let's connect!

    Otherwise, good job and good luck my friend! 

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