Need some help. I'm just 20

Multi-Family and Apartment Investing
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Need some help. I'm just 20

Iani Piha
Albany, NY 路 Member since 2018 路 9 posts 路 4 votes

Hello, my father's keep talking about this subject because someone told him how nice this subject with flipping houses is when you're smart and paying attention at the market. The difference is that he's focusing just on flipping and I would rather go on Rental Properties because I realise on a long term how much money you can create

I'm so so glad and happy for finding this app because I read and learn so much intersting things. I hope you guys will guide me to take it step-by-step because even if I have big plans like:

- in a few months I want to become a realtor

- by the end of the year (2019) I want to have already my first passive income from a rental property

The big questions is: I heard something about "Lease Purchasing" without downpayment or any money but in my case it's hard to do that because I'm too young for people to trust that I know what I do and just transfer me their houses. And if there is a way to have a rental property without having money.

Please help a young guy with some big big dreams. Thank you even if you won't answer me but at least read my story 馃搱馃彉馃彙馃彚

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Account Closed
Member since 2018 路 83 posts 路 66 votes
7y

Hey Iani, great to see your motivation to get started in real estate.  I think you're correct to focus on rentals long-term, rather than flipping.  There are plenty of people who do well in flipping, but there are a few reasons why this might not be the best option for you at the moment:

- You can lose your shirt if you don't know what you're doing

- You'll need enough capital to both buy the house and also fix it up

- The market is starting to soften, so flips may not be as easy to sell as they would be in a very strong market

If your goal is to start off with one property in 2019, one great option for you might be to combine the concepts of flipping and house-hacking.  If you can save up (and possibly borrow from/partner with friends or family) to buy a 2-4 unit property that's rentable in its existing condition, you can live in and fix up one unit while the others are rented out.  Every 6 months or so, move into another unit, fix it up, and raise the rents in the unit(s) you've already improved.  When you're done, you'll have a much more valuable asset, and you'll have been living "rent free" the whole time.  Good luck!

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  • Account Closed
    Member since 2018 路 83 posts 路 66 votes
    7y

    Hey Iani, great to see your motivation to get started in real estate.  I think you're correct to focus on rentals long-term, rather than flipping.  There are plenty of people who do well in flipping, but there are a few reasons why this might not be the best option for you at the moment:

    - You can lose your shirt if you don't know what you're doing

    - You'll need enough capital to both buy the house and also fix it up

    - The market is starting to soften, so flips may not be as easy to sell as they would be in a very strong market

    If your goal is to start off with one property in 2019, one great option for you might be to combine the concepts of flipping and house-hacking.  If you can save up (and possibly borrow from/partner with friends or family) to buy a 2-4 unit property that's rentable in its existing condition, you can live in and fix up one unit while the others are rented out.  Every 6 months or so, move into another unit, fix it up, and raise the rents in the unit(s) you've already improved.  When you're done, you'll have a much more valuable asset, and you'll have been living "rent free" the whole time.  Good luck!

    3Reply
  • Stephen Karakitsios
    Rental Property Investor 路 Sicklerville, NJ 路 Member since 2017 路 17 posts 路 8 votes
    7y

    Hi Lani, 

    Your head is in the right spot. I'm a new investor as well. I am interested in investing in multifamily units but as I did my research, I decided to purchase a single family home instead. I suggest starting with a SFH or house hack so that you can keep costs low considering you're young. This will allow you to get some experience under your belt and decide which strategy is right for your goals.

    Keep reading and learning from BP so you can gain the knowledge necessary to find profitable deals. Good luck!

    2Reply
  • Iani Piha
    OP
    Albany, NY 路 Member since 2018 路 9 posts 路 4 votes
    7y

    @Barron Brittingham

    Thank you so much for you response. That's actually the thing I want to focus but the thing with improving will be helpful and I will never forget it for sure. But first I want just to save money (1500-2000$ / month) and to buy a duplex at the end of the year when I'll have like 15k-20k for investing. Meanwhile I will build my crdit so I can buy the house more easily. Thank you again for your response. Until I have the money to jump in, I'll get my relator license and learn as much as possible about laws and rental properties. Thank you!

    1Reply
  • Iani Piha
    OP
    Albany, NY 路 Member since 2018 路 9 posts 路 4 votes
    7y

    @Stephen Karakitsios

    Thank you Mr Stephen. If you see the reply I would actually to ask what are you reffering by "house hack" and if you can give me some more information. Thank you so much. I assume I'll have like about 15k-20k saved by the end of September-October to jump into my first investment.

    0Reply
  • Demario Scott
    New to Real Estate 路 Belleville, IL 路 Member since 2018 路 82 posts 路 42 votes
    7y

    @Iani Piha house hack, referring to you buying a multi unit property or single family and renting units or rooms. Scott trench wrote a book set for life and it鈥檚 a good book for the younger crowd and it explains house hacking.

    1Reply
  • Melvin Noriega
    Rental Property Investor 路 New Bern, NC 路 Member since 2015 路 43 posts 路 22 votes
    7y

    As mentioned by a few BPers before me, house hacking could be a wonderful solution. I would personally recommend you take a good hard look at the area that you plan to invest in and get a strong understanding of what makes sense there. Some places are amazing for cash flowing rental properties, while other markets do better with appreciation. Once you have a good understanding of your area, I would urge that you jump into a multifamily home if possible. Best case scenario, you get your hands on a fourplex with an additional room that technically shouldn't exist. In theory, you could have four tenants, live for free and make really good cash flow all at the same time as your paying off that mortgage. You could utilize an FHA loan that will only cost you 3.5% down of the property's costs, plus closing costs and any additional fees you may have. If you are interested in learning how to make deals work with little of your own money, I recommend you look at Brandon turners book on investing in real estate with low or no money down. PM me if there's anything I can do to help you out.

    1Reply
  • Iani Piha
    OP
    Albany, NY 路 Member since 2018 路 9 posts 路 4 votes
    7y

    @Melvin Noriega

    WOWW! Thank you for these new information!! I had no idea about FHA LOAN. I had NO IDEA that you can buy something with less that 15-20% of its price value!! Thank you! Have more information about these kind of loans?

    0Reply
  • Iani Piha
    OP
    Albany, NY 路 Member since 2018 路 9 posts 路 4 votes
    7y

    @Demario Scott

    Thank you!! Thank you buddy! I'm glad there are more young guys intrested in doing business than watching TV and hanging out ;)

    0Reply
  • Melvin Noriega
    Rental Property Investor 路 New Bern, NC 路 Member since 2015 路 43 posts 路 22 votes
    7y

    @lani Piha 

    Well, I'm not sure what information you would like, in short, it is a government-backed loan that would cost you 3.5-5% down and monthly mortgage insurance. The monthly insurance is really not an issue if you factor it into your numbers upfront. Look into Homestead funding and see use them as a baseline to compare with everyone else so you ensure you get the best rates.

    0Reply
  • Kevin Prigge
    Investor 路 Mounds View, MN 路 Member since 2011 路 17 posts 路 12 votes
    7y

    @Iani Piha,

    You can find more info on house hacking on the podcast, search in the podcast area for "hacking" and it will come up with a list of shows that focus on it.  

    1Reply
  • Iani Piha
    OP
    Albany, NY 路 Member since 2018 路 9 posts 路 4 votes
    7y

    @Kevin Prigge thank you!!!

    0Reply
  • Demario Scott
    New to Real Estate 路 Belleville, IL 路 Member since 2018 路 82 posts 路 42 votes
    7y

    @Iani Piha completely, what time in life is more pivotal than our 20鈥檚. I can be a success in old age like kfc鈥檚 founder however if done in my 20鈥檚 it all compounds. Young people we have little money but time, mid age a little of both, old age money but no time. For me I imagine having he time money and whatever resource to live a fulfilled life. And as for tv and what I much rather read and podcast I live on purpose.

    1Reply
  • Ian WalshBusiness Member
    Lender 路 Philadelphia, PA 路 Member since 2016 路 2k+ posts 路 1k+ votes
    7y

    Age doesn't matter in this business.

    1Reply
  • Chris Szepessy
    Catskill, NY 路 Member since 2018 路 636 posts 路 668 votes
    7y

    It's great that you want to start out so young. Many people on here wish they had done the same. I remember being 20-21 and thinking about it. I had an acquaintance who bought rental property in Albany and since I'm only 35-40 minutes from there, I took a couple days driving around looking at properties. I never followed through. If I had, I probably could've been "retired" by now. I'm also going to recommend the house hack and FHA loan financing. Being in Albany with the colleges, you could probably do pretty well with renting out individual rooms to college students, depending on where you buy a property. It might be a good idea to get your feet wet with long term tenants in the beginning, though. I know college kids can do some damage if you rent to the wrong ones. I think there's a BP podcast from a while back with a guy who only does college rentals. If it's something that might interest you, then maybe give it a listen.

    I had considered looking into Albany when I'm ready to buy again since it seems to be more affordable than where I live. 

    1Reply
  • Account Closed
    Member since 2018 路 83 posts 路 66 votes
    7y

    @Ian Walsh agree with you that age doesn't matter... except to the extent that younger folks typically have fewer resources and less experience.  They have to be a bit more careful to avoid costly setbacks.  I think that's where Iani is coming from. 

    @Iani Piha Remember, "you make your money when you buy."  Do your diligence and make sure you buy your first deal for a good price.  If you overpay, you'll have a hard time making enough money on the back end to keep going.  2 books I'd recommend you read... Rich Dad Poor Dad by Robert Kiyosaki and Tax Free Wealth by Tom Wheelright (Kiyosaki's tax advisor).  There are great tax breaks for real estate investors that can dramatically increase your returns over the long run, especially the 1031 Exchange.  Just be sure to consult with a tax advisor who understands real estate.  

    1Reply
  • Nate Monson
    Real Estate Agent 路 Albany, NY 路 Member since 2017 路 309 posts 路 149 votes
    7y

    @Iani Piha shoot me a message if you want to chat about the market. I am a realtor in Albany, NY and work frequently with investors. You've got your mind going in the right direction.

    1Reply
  • Wendy S.
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    7y
    @Melvin Noriega. I am also relatively new (but older) though I have purchased 1 property last year and looking to purchase another or two 2019. My question though is I notice you and others tend to suggest FHA loan for starting out, as opposed to a conventional 3% down loan with PMI that can be removed at a later date. Is this specific to duplex/triplex/fourplex? I am asking as I purchased a SFH with a conventional 30 yr mtge with 3% down and have chosen to house hack by renting per room. I believe there are programs and grants available for first time home buyers as well. Will anyone please shed some more light. Thanks.
    0Reply
  • Jason C.
    Rental Property Investor 路 Merrick, NY 路 Member since 2017 路 33 posts 路 31 votes
    7y

    @Iani Piha I don鈥檛 know about the purchase strategy your referring to but I do know that the younger you get into rentals they better. I started at 25, and now at 37 have a nice portfolio that鈥檚 been making my pockets bigger for years. What markets are you looking into for your first purchase and how are you evaluating your deals?

    1Reply
  • Iani Piha
    OP
    Albany, NY 路 Member since 2018 路 9 posts 路 4 votes
    7y

    @Jason C.

    Today I made my plan and want to focus just on Rental Properties. I want in 5 years from now to have 10 Properties and a Passive Income around 8000-9000$ monthly and this just by saving, investing and repeat. What I want to do is to learn as much as possible the market, the house hacks everything so I take my decisions wisely!

    Thank you!

    1Reply
  • Iani Piha
    OP
    Albany, NY 路 Member since 2018 路 9 posts 路 4 votes
    7y

    @Nate Monson

    Thank you so much! It is really a big step forward for a 20 years old guy like me. I know the dreams I have and I also know that this involves a lot of work. What I want to know is all the types of purchase, when it's profitable to sell even if you'll lose the passive income, the strategies, what should I search for, etc. I sent you a message. Thank God for meeting you and everybody here that can give an advice.

    0Reply
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