Advice to your 20 year old self

General Real Estate Investing
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Advice to your 20 year old self

Raul Sorto
Duluth, GA · Member since 2017 · 5 posts · 2 votes
Hope this post finds you well. As I sit here at my J-O-B sharing my first post to the bigger pockets family, I would like to get some feedback/ direction. So a little back story about me, I'm 20 years young from the small country of El Salvador. Due to my citizenship status I was unable to receive my scholarship to play soccer. (Fast forward my personal sob story) as a young ambitious man, I began to look around and think about my future. I was blessed to travel the U.S and meet many wealthy individuals from all walks of life. I soon came to realize that most so called "successful" people in my eyes protected their wealth in real estate. So I have been doing my research, reading and learning as much as I can about investing, looking around for the niche that fits my situation. But I feel like I have really been overthinking this. I have been selling cars for about a year and half now and I have an average credit score in the mid 700s. I have never finaced a home. However, my father has wanted to put me on the existing loan with him on our house.(Due to the fact that I handle our finaces and his language barrier) with some major upgrades done to the house, we have a little bit of equity in the home and our lender has talked to us about digging into our line of credit. With rates going up and the way the economy stands, do you all think it would be best for me to pull out a loan and purchase another home while renting this primary one out. Or should I invest in my own future and avoid risking my fathers biggest investment. Potentially look for a small duplex/ quad, live in one and rent out the rest (as a buy & hold) potentially to college students with parents as cosigners of course or should I focus on raising capital while this tipping point boils down and prices drop some before I decide to go in? Maybe look at wholesaling or probate deals? As you can see I'm really really focused on my future, I'm just at a standstill in life selling cars everyday and I feel as if I'm not progressing. Thank you for reading and feel free to leave your thoughts! P.S If you are investor in the greater Atlanta area willing to spend some time with me, I will gladly buy you lunch. Blessings to all
2Reply
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Steve K.
Honolulu, HI · Member since 2017 · 247 posts · 315 votes
7y

"when you love, wear a glove"

15Reply
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  • Karl B.
    Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
    7y

    Your credit score is good, especially for your age. Most 20-year-olds have either bad credit or no credit. As for selling cars, strive to become the best car salesman you can possibly be. 

    Learn how to master sales. Read books on sales, watch Youtube videos on the subject, etc. You can even consider getting your real Estate license if you feel you'd enjoy selling properties. 

    There are so many different ways to make money for a down payment on your house hack. There's a guy in L.A. who is on Youtube who flips used cars on Craig'sList. He buys them, fixes them internally and cosmetically and flips them. The last I watched of him (probably close to a year ago) he was planning on buying RE with his daughter. 

    Think of ways to earn extra income. If you remain focused there's no doubt you'll be successful in RE. 

    2Reply
  • Rush Wall
    RE Investor · Newnan, GA · Member since 2015 · 309 posts · 132 votes
    7y
    @Raul Sorto if I could go back to 20, I would buy a quad. Live in one and rent the other three units out to cover the mortgage.
    6Reply
  • Brock Mogensen
    Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
    7y

    I would suggest going the route of buying the multifamily property and living in it while renting the other units out - commonly referred to as house hacking. This will provide you with the confidence to do the next larger deal.

    In the process of doing this continue to expand your knowledge for REI and focus on doing larger and larger deals.

    2Reply
  • Frank Wong
    Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
    7y

    Hi Raul,

    Your title was Advice to your 20-year-old self.  I would tell myself, don't rush and jump into something you are not ready.  Number one thing is to increase your income and sales skills not buying a property.   Be patient and wait.  The money is made not rushing into things but sitting observing and striking when the right deal presents itself. 

    The end goal is not the prize, the journey is.  Good luck

    4Reply
  • Steve K.
    Honolulu, HI · Member since 2017 · 247 posts · 315 votes
    7y

    "when you love, wear a glove"

    15Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    Don't involve your fathers money, go it alone.

    My advice is to concentrate on advancing your employment income. Car sales is not going to cut it. You need a full time good paying career that is not in any way based on commissions if you want to get descent financing. You are young and investing can wait until you build your career.

    You may want to consider a trade that you can use to add some value to your investing in the future. For now, while concentrating on your employment educate yourself on finances, investing, real estate. There is a lot to learn and it will take some time to digest it all.

    Give yourself a few years to get settled.

    1Reply
  • Stephen Thomas
    Rental Property Investor · Honolulu, HI · Member since 2018 · 11 posts · 17 votes
    7y
    Im with @Frank Wong in this one. The skills of prospecting, communicating and solving other peoples problems are quickly taught in sales jobs and reenforced everyday. Sales is one of the few careers where you can also quickly change your income simply by putting in more effort. My W2 job is in sales and I have had no problem qualifying for any of my mortgages with traditIonal banks and portfolio lenders. What they want to see is how consistent the income is coming in and I think it helps to show that your income is also naturally growing year over year as you build your network and strengthing your skills.
    3Reply
  • Ken NyczajPro Member
    Investor · Grasonville, MD · Member since 2017 · 453 posts · 415 votes
    7y
    @Raul Sorto read every related book on real estate/ business/ self help book you can find. Ton of great book recommendations on this site.
    4Reply
  • Account Closed
    Rental Property Investor · Torrance, CA · Member since 2016 · 724 posts · 1k+ votes
    7y
    @Raul Sorto I would tell my 20 year old self to focus on W2 income first, then invest in real estate. I’ve always known that whatever I did I wanted to be “self made.” For this reason I never valued formal education. I figured I would skip college and become a millionaire by the time I was 30. Well, now I’m 32 and while I’m better off than most of my peers that went to school, I’m by no means a millionaire. I graduated high school 14 years ago, and I’m just now starting to see the fruits of my labor. If I had earned a degree wIth a valuable skill and parlayed that income into real estate I’d be much further along. Don’t make the mistake thinking that real estate investing will allow you to skip the rat race. If you do it right it will allow you to leave it early, but don’t be naive like me thinking you’ll be able to avoid it all together. Go to school and get a degree that pays $$$. Forget about what you are passionate about. Think about high paying jobs that would fit your temperament. Then go get the skills needed to get that job. Avoid student loan debt as much as possible along the way. Work your a** off and buy a multi family and move into one of the units as soon as you can afford it. Keep working like mad and buy more properties. By the time you’re my age you’ll be able to walk away from your J-O-B if you want to. If I could do it all over again this is what i would do. I’m on the path to retire early if I choose to. But the amount of hours I’ve had to work to get there is insane. I’ve probably worked 60-70 hours a week for 10 years straight. Imagine if I’d just went to school and become an engineer how much easier it would have been.
    4Reply
  • Edward Liu
    Palo Alto, CA · Member since 2017 · 230 posts · 200 votes
    7y

    I would never risk your parent's biggest investment.  In addition, my advice is not to mix investments with your dad, specially if you have siblings.  I have seen too many example of things don't end well.

    Sounds like your family wants to do major upgrade to the house - suggestion is look at value of the home and see if such major investment is worth the money.   Many times people are so emotionally attached to their own home that they put in upgrades that don't add any value to their home.  

    I would save up the capital and then buy the rental - you are still young.  Set a goal on how much you need and how to achieve.  It might be boring initially, but many of us has gone through this phase (some people call it the rat race).    

    Not sure how much you are making, but try to see ways to increase your income.  Maybe even get a college degree - avoid online college.  

    You are already ahead of many people by just think about this and post on this forum. When I was at 20, all I think about is girls, parties, and beer.  

    2Reply
  • Costin I.
    Rental Property Investor · Round Rock, TX · Member since 2016 · 1k+ posts · 971 votes
    7y

    @Raul Sorto Learn to use BP to its whole potential - subscribe to BP blog and podcasts and start reading posts and listening to their podcasts collection.

    Here some recent articles good for starters:

    - one to raise you up: https://www.biggerpockets.com/renewsblog/3-important-questions-starting-investing-real-estate/

    - one to bring you back down to earth: https://www.biggerpockets.com/renewsblog/dont-just-dabble-in-real-estate-investing/

    - one in the middle: https://www.biggerpockets.com/renewsblog/cheap-free-steps-today-pro/

    You might want to read and follow these threads:

    https://www.biggerpockets.com/forums/12/topics/625324-looking-for-financial-advise-for-getting-started?page=1#p3749945

    https://www.biggerpockets.com/forums/67/topics/624342-how-to-prepare-for-a-career-as-a-flipper

    https://www.biggerpockets.com/forums/55/topics/625011-new-to-wholesale-real-estate

    You might also want to read: The Ultimate Beginner’s Guide - https://assets2.biggerpockets.com/uploads/user_file/file_object/329/UBG_2018.pdf

    ...actually the entire section: https://www.biggerpockets.com/guides

    BP has a whole section dedicated to education and starting up - https://www.biggerpockets.com/intro-to-rei/overview

    Get busy with the entire Education section on BP:

    https://www.biggerpockets.com/hubs/property-types

    https://www.biggerpockets.com/hubs/finance

    https://www.biggerpockets.com/hubs/strategy

    https://www.biggerpockets.com/hubs/finding-deals/analyze-deals

    https://www.biggerpockets.com/hubs/property-management (including TENANTS MAINTENANCE)

    https://www.biggerpockets.com/hubs/business-operations (and the sub section on REAL ESTATE MARKETING TOOLS & TECHNOLOGY TAXES & ACCOUNTING LEGAL TEAM)

    One way or another you will pay your "real estate tuition" - either in time, effort or money. My suggestion - better in time and effort, and money (through the mistakes you going to make), than paying a guru.

    Between BP and books and all the other podcasts and blogs available for free, you shouldn't need any paid training - don't fall for that. Just find a good mentor to shadow, someone willing to impart from his/her experience, take them to lunch and make yourself useful to them, and they will teach you.

    Bonus for the weekend, my collection for starters (read the comments too, and then if you like the author, go check out what else they wrote):

    - https://www.biggerpockets.com/renewsblog/stages-of-investing/

    - https://www.biggerpockets.com/renewsblog/newbies-learn-real-estate-investing/

    - https://www.biggerpockets.com/renewsblog/5-ways-to-know-youre-not-ready-to-invest/

    - https://www.biggerpockets.com/renewsblog/ideal-vs-desperate-investor/

    - https://www.biggerpockets.com/renewsblog/how-much-to-offer-property/

    - https://www.biggerpockets.com/renewsblog/hazardous-attitudes-of-investors/

    - https://www.biggerpockets.com/renewsblog/2016/05/31/21-traits-scammy-real-estate-investment-guru/

    - https://www.biggerpockets.com/renewsblog/youre-not-cut-out-to-be-real-estate-investor/

    - https://www.biggerpockets.com/renewsblog/questions-new-investors-should-ask/

    If that's not enough, ping me and I'll give you a collection of blogs and podcasts to follow.

    2Reply
  • Raul Sorto
    OP
    Duluth, GA · Member since 2017 · 5 posts · 2 votes
    7y

    Thank you all for your responses! I'm definitely in no rush, mainly just focused on showing job stability and increasing my income. Being a 1099, I also purchase cars at auctions and flip them, so I would say I make more than the average 20 year old. I save 15% of everything I make and have used most of my earnings to upgrade my fathers kitchen, bathrooms, and we recently just added a stone patio with a fireplace in the backyard. So his property is definitely something I would never jeopardize. I just want to add value to the property, but now I'm looking for my next move. I will devote myself to learning as much as I can, as I'm barely scraping the surface right now. Networking and reading are at the top of my list and as some of y'all suggested saving and waiting for the right deal to present itself. Much gratitude to all of you, I definitely have a better understanding of what I need to do to get where I want to be. 

    0Reply
  • Will GastonPro Member
    Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
    7y

    1) Read at least one hour per day every single day.

    2) Remember the quote by Jim Rohn "You are the average of the five people that you spend the most time with."

    3) Check for toilet paper before sitting down.

    4Reply
  • Linda S.
    Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Raul Sorto,

    Don't overthink this.     Don't make it more complicated then it needs to be.   You can make a lot of money in a lot of things, but IMO it's best to find what you like and put all your energy into that.     

    If you can, buy a duplex/triplex and house hack-- this will benefit you immediately  and long term.    You won't look a back and regret it-- you will look back and regret not buying a duplex/triplex.    After that, focus on wholesaing/car sales, whatever makes you happy and you are good at!

    1Reply
  • Bjorik Mutize
    Real Estate Broker · Minneapolis, MN · Member since 2016 · 530 posts · 398 votes
    7y
    @Raul Sorto read more, protect your credit, protect your finances, network more, spend everyday learning deals, start bigger.
    1Reply
  • Dustin Beam
    Kansas City, MO · Member since 2015 · 609 posts · 321 votes
    7y

    Read Set for Life by BP's own Scott Trench. It's the closest thing to a road map in this game that I've personally read. Just lots of good advice in there, even if you don't follow it perfectly.

    2Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y
    I would have told myself , put the bottle down and Instead pick up a book called -rich dad poor dad and invest in building an asset base instead of trying to kill yourself punching a time clock making the boss rich.
    3Reply
  • David H.
    Madisonville, LA · Member since 2018 · 125 posts · 71 votes
    7y
    If you have some money saved up I would start looking for something. If not I would start working on that. Pulling the equity from the house you are in can work as well I would just be extra cautious since it's your families. If I was talking to my self in my 20s I would say dont get discouraged. I did a flip and rental and got hit by the 08 crash so it soured me on it until about 2 years ago and I missed great opportunities. Just view setbacks as learning opportunities to use in the future. Just keep plowing forward. You ate already ahead so just stick with it and you will be in good shape.
    1Reply
  • Mykhail Bolden
    Chicago, IL · Member since 2015 · 61 posts · 12 votes
    7y
    @Raul Sorto Salute to you sir on the credit and hustle of flipping cars I too used to buy at auctions and fix and sell myself but unfortunately got burned and will be starting back in January. Even though I’m only 23 and no deals under my belt yet I like this post and want to participate 1) I would skip going to college avoid debt(may be a lot who disagree but this would be for me personally) and apply for decent W-2 job To gain access to get loans easier and continue to flip cars (at least make 3k after taxes and expenses) 2) DONT BUY brand new BMW at 19 and Lots of burberry and ferragamo clothes lol- instead save capital 3) Fix credit 4) Read several books about investing, sales, etc (start with rich dad poor dad) 5) Find mentor and also REI team 6) Once ready with team to pull the trigger on REI start with house hacking or BRRRR All the above info is dead on. If you were from my city I would definitely try to network with you, you seem young and hungry like myself. Keep going and Good luck!
    0Reply
  • Chris Szepessy
    Catskill, NY · Member since 2018 · 636 posts · 668 votes
    7y

    I had intentions on starting when I was around 20. If I had, I'd be so much further ahead by now. It seems like you're on the right track..good credit, good job, and you know what you want in life. Read all the books you can and save a much as you can until you're ready to buy a house. Definitely look for a duplex/triplex/quad. Don't buy expensive clothes, cars, etc. Don't worry about "friends'' making fun of you for being cheap or boring for not wanting to go out every weekend. Focus on your future now so by the time you're 30 you can have the option to "retire" if you want. 

    Also, I would advise against going on the mortgage for your father's house. It will affect your DTI.

    Side note-my 11 year old son is big into soccer. Has dreams of going "pro" (as most young kids do with whatever sport they're into). In the event it doesn't work out, I'm trying to teach him about RE. lol

    0Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    7y

    Don't buy the new BMW you always wanted... purchase price $20k... today's value $14k and dropping. 

    Wait until you're assets can purchase it for you. 

    0Reply
  • Jim Goebel
    Real Estate Investor · Des Moines, IA · Member since 2016 · 922 posts · 533 votes
    7y

    @Raul Sorto

    Commendations on your credit score and humility in asking for help.

    I would not be looking to 'combine' finances by using equity in your dad's home to invest.  

    Mixing family finances is a path I would avoid at just about any cost.  There are other paths to success.  Do it on your own Raul!

    0Reply
  • Brian Mcmenamin
    Rental Property Investor · San Diego, CA · Member since 2018 · 176 posts · 83 votes
    7y

    @Raul Sorto I agree with @Rush Wall on this one. Find a multi-family live in one and rent the rest. Keep selling those cars until you have enough for a down payment. I wouldn't mix funds from your fathers primary residence to allow for down payments on an investment. In the event something goes wrong, you might put your Dad in a tough spot. Good Luck Raul. 

    0Reply
  • Brian Mcmenamin
    Rental Property Investor · San Diego, CA · Member since 2018 · 176 posts · 83 votes
    7y

    @Raul Sorto I agree with @Rush Wall on this one. Find a multi-family live in one and rent the rest. Keep selling those cars until you have enough for a down payment. I wouldn't mix funds from your fathers primary residence to allow for down payments on an investment. In the event something goes wrong, you might put your Dad in a tough spot. Good Luck Raul. 

    0Reply
  • Kris Bucci
    Developer · Victoria, BC · Member since 2018 · 115 posts · 73 votes
    7y

    Advise for my 20 year old self... buy a multi-family home, house hack to the fullest.  Not only rent out the other units, I would rent out the other rooms in my unit to buddy room-mates.  This should allow you to make  profit on the property, which you could save along with the equity gain to help buy your next one.  Don't spend it... keep the rental profits for the "rental business", use your job money for fun money.  You still need and want to live, especially at 20!!!

    0Reply
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