I'm in need of some opinions about my situation. Wondering if when and how to invest.

11 Replies

Hello everyone!  I am wanting get some opinions from you all on my current situation. I have been reading/researching real estate investing for a few month now I haven't began investing just yet. My only experience was having an offer turned down on a hud home that I wanted to flip. 

So,  for a little background. My fiancé and I are still pretty young,  at 26 and 24.  We currently have a lump sum of cash nearing $200k in a mutual fund, and full time jobs that put us square in the middle class.  

This is where my question comes in. We had planned to leave that sum of cash alone in the mutual fund, throwing a bit more into it month by month,  and one day (hopefully somewhat young) using that for retirement. What I'm wondering is how we should be going about investing our money, in order to get us to the earliest and healthiest retirement. 

We live in central Oklahoma,  where property can be had for a good value. Are we better off buying into some buy and hold properties? Continuing to grow the money grow with our current plan? Experimenting with a flip? 

Any help, advice or shared experiences are appreciated!  

Andy,

First let me say congratulations for your financial position.  You are well on your way to becoming financially independent.  You have a great position to start from.

Second, I always advise new investors to "measure twice and cut once" when getting started.  I urge you very strongly to not be in a hurry to jump into a real estate investment until you have done your requisite study.

Bigger Pockets is a great place to start your study.

If you have never flipped before, I recommend that you connect with someone in your area before you experiment. Join an REI and get plenty of references prior to committing any of your assets.

Ultimately, you have to determine your goals.  

Do you want to become a full time real estate investor flipping houses or do you want to be a hands off landlord with a property management company to handle your issues.  Or some combination of the two.

Once you define your goals, your strategy should support the attainment of those goals.

Chris

I'm no REI afficianado by any means, but I'll throw my two cents in here. When it comes to my retirement, I am not looking for net worth, but cash flow that will sustain a comfortable and worry free lifestyle. That being said, I'd take a look at notes, or buy and hold investing.

-Jason E. 

id say buy and hold.  cash flow is good and if done right here in okc you can get from 10% to 15% return on your funds.  I have a feeling your mutual fund is not doing that well (i may be wrong though).  

Hi @Andy Hailey  

First of all congrats for getting this far at your young age,

you are already in a better position then 99% of the others at your age!

The first and foremost I would recommend would be to buy yourself a home, whether to live in for yourself or as an investment property.

You wouldn't need to put all your savings into it, and therefore you could that way diversify your portfolio, having some cash,some mutual funds and some real estate.

Not putting all your eggs in the same basket is always a good recommendation...

Personally I like Oklahoma as I believe that there are alot of interesting investment opportunities with above the average returns and lower risks then other states.

Good Luck!

@Andy Hailey   I am a buy and hold investor and would recommend it if you are looking to supplement your income someday.  It is not sexy or exciting and there will be no TV shows about it.... but if done right and steadily it can lead to an early retirement.  

Also get to know your local investors and start making connections. As you grow you will eventually need help, partners, service providers and your REIA is a good place to start. Here are a few

http://www.biggerpockets.com/rei/oklahoma-real-est...

Brie Schmidt, Real Estate Agent in Illinois (#471.018287) and Wisconsin (#57846-90)

If you ask a stripper how to make big bucks, part time, with little effort, they will likely tell you to be a stripper!

Ask investors on this site what you should do will likely have the same results.

You're in great shape at your age. You should first be trying how to use your money while conserving your money, first thing you need to understand is how to keep money, not spend it.

You also have enough money for professional advice by someone who has greater insight to your situation than we will ever know in a forum.

If you want to get into RE, begin by learning RE, not the investing stuff spoken of here, but formal real estate knowledge that most here still don't know.

Then inform your advisor that RE is to be your focal point or to what ever extent of your portfolio to invest. Understand most financial advisors sell financial products so understand their agenda. There are "fee only" advisors.

Understand RE financing and leverage, you won't need to actually use your money, but that money on hand makes life easier in getting loans or other financing.

Last note, don't start out with junkers, begin with marketable, decent homes, you could also consider a small apartment building, but before you select what and how you will invest you first need to learn the basics of RE, not RE investing stuff here, but RE basics, like agents must learn to get a license. Get the OK book for agents, probably at any RE school. Then when you understand the basics you can examine your market and that will take you to the ways of formulating your goals.

At your age, you'll be tipping over a million (which isn't that much now days) simply from interest on your accounts after 40 years, give that a little kick and invest along the way you should be hitting over 2M. Work at it, yo might target 10M or more, but understand, it takes knowledge ( real education and experience) and time. Good luck! :) 

@Bill Gulley  

I have to disagree with you Stripper analogy and that advise from "Professional Advisors" is better advise from people that are knee deep in field with hands on experience. The best coaching and advise I have ever gotten in REI was right here for Free.

Originally posted by @Amine E. :

@Bill G. 

I have to disagree with you Stripper analogy and that advise from "Professional Advisors" is better advise from people that are knee deep in field with hands on experience. The best coaching and advise I have ever gotten in REI was right here for Free.

No problem, you're not in his situation and my advice was to him, not applicable to most, but I'm sure he understands. :) 

Hey Andy,

Congrats on saving up such a great nest egg for ya'll at such an early age in life!

I'm no Gurru by any means but I do know the headaches of flipping.  I would start with an affordable rental purchase that would appeal to a broad range of tenants.  We recommend to our clients that we manage for, to stay in SW, NW, Moore and Norman areas.  But for your 1st deal, I would recommend a 3bed 2bath home on SW side of town south of 59th st that you could purchase for under 70% of value (stick with price tags between $35k-$55k) that has repairs around $0-$8k.  There is never an end of good quality tenants in that criteria.  That way, you can cash flow on your first deal, and you get some rehab experience under your belt.  I would'n t attempt a flip till after you have done at least 5 rental fixups.

There is a lot more to it but that's my 2 cents anyway.

Hello Andy,

As others have said, you're off to a good start. You really need to define your goals and your timeline first. When do you want to retire, how much net worth or cash flow are you looking to have to retire, etc. Certainly flipping is great for quick chunks of cash...that is if you can find the deal, and you do your numbers right, and the moon and stars align and well you get my point. It's a job...that pays pretty good if everything works out, but there are risk and wouldn't recommend you start that way.  I truly believe the real path to wealth in real estate is buy and hold. When you look at it, someone is paying you cash flow each month and building YOUR equity in a property. Are their headaches and risk? Sure, just like in any other business or investment, but long term the track record is there. Be smart about it, and look to BP for support and answers. You're doing pretty well for yourself so I'm sure with some time and research you'll put a plan together and pull it off. 

(405) 561-1887

@Andy Hailey Welcome.

I'm with @Bill G. 's advice, check out Stripping and Professional advice, there's a lot of posturing and BS on this site.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.