What should I do?

20 Replies

I have been out of college for a year and a half now, I graduated with a degree in finance and management, but I am working on a sales job that has nothing to do with finance. I have been wanting to make a career out of real estate investing for a couple of years now, the problem is that I don't know what should I do or how to get started because I don't have the funds to get started, as a matter of fact I have a 10,000 student loan, a 13,000 car loan to pay for and I am currently renting. In my current job am getting an average of 2,200 take home every month.

I guess my biggest problem right now is weather get into an entry level career that relates to what I want to do and get an ok paycheck or get into law enforcement which pays well after a year or two 75,000-80,000 in my case  and start making more money and pay off my loans and start investing after that. I am 26 right now. 

Any advice or similar experiences that you have been through will be highly appreciated.

Thank you everyone

@Fernando Valenzuela   there are a lot of people that work full time and still do real estate investing.  It's easier to do real estate investing when you have a full time job.  Not to say you can't do it otherwise, it's just easier to get loans.

Hey Fernando! 

You sound similar to myself and a lot of other investors around our age! Have a degree some debt and a job that our degree has little to do with. This is where you have to do some reflection within yourself and find your motivations to either transition into real estate or climb the corporate ladder and play that game.  If I were your Id ask myself how can I transition into real estate, sustain myself financially yet progress steadily to where you want to be in real estate. Ask yourself can you learn an accounting software and offer book keeping services part time while holding your job, to Real Estate investors in your area?  This way you'll be learning what the best or worst investors are doing... Or what other small head aches can you solve for investors with technology that your degree may warrant your credible to do? I don't know if this helps or makes any sense but just a couple suggestions... 

deal drugs....just don't get caught.

Do you want it enough to sell the car?  That car loan is dumb at your financial level.  It aint sexy but that's how people build wealth.  Some of the poorest neighborhoods have some of the nicest cars while some of richer neighborhoods have some of the oldest crappiest cars you will ever see.  Time to change your thinking.  Read 'stop acting rich'. The first chapter is free as a sample on kindle app and it summarizes the whole book its all you need.  Change your thinking and you will look up in 10 years with a different life.  Good luck!

I second what @Eric B.  is saying.  Evaluate what is important to you and make a plan of where you want to go.  This wont happen overnight so you will need to be committed to what your goals are otherwise you will toss them aside when the going gets tough.  

Do you need that car with that loan or is it something you "want" to have?

You are stuck with the student loan bill, but what can you do to pay it off faster?

You are renting, can you find a cheaper place to rent?

If you didn't have a car payment, student loan, and high rent what would you do with the extra money?

Do you have the discipline to save money in order to come up with  a down payment on an owner occupied unit, that you can rent out either a room or another unit if it is a duplex or higher?

There are lots of ways into real estate but it is like anything else in life if it were easy then everyone would do it and it would only take a week to see long term results.

Hello Fernando,

My story sounds similar to yours. I too wanted to invest in real estate at a young age, but just like you I lacked the funds to do so. In 2003 I started to invest small, my first real estate purchase was a vacant residential land in Polk County, Florida. Purchase price was $3,500 for a quarter acre residential lot. I resold the lot for $5,000 with owner financing at 8% interest for a term of 3 years. I repeated the process about 9 times and created my portfolio. I purchased these lots through local realtors and was paying close to full price. At first, I wanted to finance a lot but every seller I came across wanted a cash sale which I could not afford. I believed that if these sellers were willing to finance their land they would sell the properties faster and a buyer will be willing to pay a higher premium. Lucky for me I was right! I pulled all the cash from my credit cards plus a small loan from mom and dad and completed my first purchase. I financed all 9 properties within a matter of 7 months and produced a monthly cash-flow.

You need to take action and be creative in real estate. The only limitations there is are the ones you put on yourself. Think outside the box and you will find your path. No risk, No reward.  Good luck!

It is being a while since I posted the question and just wanted to say thank you to all of you who took your valuable time to give me your opinion, advice and help with my question.

Thank you guys

@Fernando Valenzuela  ,

I am in a similar situation, I graduated school with a Sociology degree and currently work in a sales role at a technology company. Fortunately for me its a great fit and has proven to be lucrative. I currently have a student loan debt of 30K and I don't have a car loan (under my name). My plan as it stands now is to acquire an FHA loan in 6 months time and invest in a Multifamily house.

I honestly believe that you shouldn't just change a career for capital. I am not saying that you need to walk into your job everyday and love every part of it but I do believe that being passionate about your career will only increase productivity therefore increase the chance of success. 

Fortunately for us we are still young! We are smart to get into REI early but if we can't it wont be the end of the world.

Hope it helped,

Taylor

Fernando,

I'm almost 20 years older than you and if there's one thing I wish I would have done at 26 is to house hack.

More specifically to buy a fourplex and live in one of the units. To maximize the return, get a fixer upper fourplex and renovate the unit you live in, moving around and raising rents as you complete the renovations.

Once all units are renovated, the property should cash flow if you rented all units. Then it's time to find another fourplex and do it all over again.

I am recommending a fourplex as you can get FHA financing with 3% down. For bonus points, you can try for seller financing or a lease/purchase option.

Good Luck!
Erik

Thank you guys for the advises and opinions,

Now my plan this year is to get an FHA loan and purchase a multifamily house and live in one side while renting the other(s). Now what is really getting to me right now is the fact that I know I can get a job in law enforcement which will start me around 80,000 and a little over 100,000 after the fifth year, which seems extremely attractive to me, but than again sometimes I feel I should stick to the job I have right now, and try to do something as a part time in real estate that could generate me a little more income such as wholesaling or as an agent.

As you can see I am a little confuse as what I really which route to take. Should I go for the law enforcement side or should I get starter a little by little as part time in the real estate side.

Thank you everyone, all of you have been very helpful with your opinions and advises which I truly appreciate.

Do you want to start a business? If that is what you want to do, try getting a loan or a mortgage to start one. Since you have learned finance real estate would be the best option for you. Getting the first mortgage might be difficult but once you accomplish that things should be easy. If you want to try your hand in real estate begin by getting advice from an expert. After that look for the best mortgage rates you can get, finalize on a mortgage only after you speak with many.

I hope things work out as you wish. All the best!

As a police officer with 24 years on the job, I'd advise against going into law enforcement just to make money. It's a thankless job, for the most part. The best you can hope for is to hold the status quo. The political/social climate is ridiculous today. People you arrest are back on the street before you complete the paperwork. If you want to do a public service job, become a firefighter. Seriously. You work 24 hours, and you're off 48 hours ! It's a great career. I wish I had chosen a different career. I'm 5 years from retirement now and hate almost everyday of it ! 

Don't buy a duplex, buy a four plex, in a decent area, where decent people want to live. The payment won't be that much more and you'll have 3 income producing units instead of 1.

Good Luck !

I'm surprised no one has asked this yet. What are the interest rates on your car and student loans? The answer is a major factor in your ideal go-forward strategy.

Originally posted by @Fred McIntire :

As a police officer with 24 years on the job, I'd advise against going into law enforcement just to make money. It's a thankless job, for the most part. The best you can hope for is to hold the status quo.

Don't buy a duplex, buy a four plex, in a decent area, where decent people want to live. The payment won't be that much more and you'll have 3 income producing units instead of 1.

Good Luck !

I agree that law enforcement is only something you should do if you are passionate about it as a career.  Is that 80K based on a 40 hour week or overtime?  It may be better to make less but have more flexibility.

I also agree that some version of house hacking would be a good starting point.  Also your degree should have some relevance to a side gig in real estate that can help you network with investors/agents/lenders/etc.

Everyone has been giving great advice financially.  All I have to add is that at the end of the day, investing aside, you have to enjoy what you do with your time.  Money is money - you can do a lot with a little, or a little with a lot.  It's how you manage it.  Get the job you want and enjoy for your sanity, and plan your finances accordingly.  An extra couple of grand a year isn't worth you not loving  your life 40+ hours a week.

@Fernando Valenzuela  What are you the most passionate about doing? I was a cop for 10 years and it was a great overall experience. But at a certain point, it became just a "paycheck" and was a drag like a lot of other 9 to 5 jobs except with a LOT more stress. The guys with more time than me talked about the time they had left to retirement as if it were a prison sentence. I'm not a cop anymore but I still have a "day job" and I'm working towards financial independence, which I will reach one day.

If you're passionate about being a cop and have a plan to leave in 5-10 years once you become a successful real estate investor, I say go for it. If you're only interested in the paycheck, find another job or devote yourself to what you really want to do and that sounds like real estate. Cut your expenses to the bone and find a job working for a successful real estate investor or a real estate related company that will help you pay the bills and give you the opportunity to get the experience you need. If you're not passionate about wanting to be a cop, you'll probably find that the headaches and discomfort you'll face won't be worth it. Good luck!

It would be better to get advice from any of the lenders or mortgage and loan providers. Instead of getting vague ideas, it’s better to get a clear cut idea on the rates and the procedures. I used to consult a home purchase mortgage in Vaughan for all home mortgage and loans related issues.

@Fernando Valenzuela Have you considered househacking? It's a great way to start if you are located in the U.S. The Book on Investing With No And Low Money Down explains many of the methods one can use to begin investing. I would start out there. 

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