Aspiring investor who is graduating

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Aspiring investor who is graduating

Ryan Jones
Real Estate Agent · Snohomish, WA · Member since 2015 · 2 posts · 0 votes

Hi everyone, it's great to be here on the forum. I would like some advice on my best moves early on in my investment track. As a student coming out of school I have amassed around 40k in student loan debt. I have a potential career as a sales engineer for a few different companies I am interviewing for which should provide around 60k+/yr starting out. I also have a house for sale in Arkansas which should fetch around 150k before closing, taxes, and all that. I live in the bay area of California so investing here isn't really an option outside of owning a house for myself to live in.

What I would like to know is:

1)What is my best strategy to invest in an income property or properties after my house sells? (I was looking around the Austin area for multifamily homes that I could buy outright since I have student loan debt and not the best credit score, it's around 615 atm)

2)What should be my plan to invest in other properties once I find my first one to build passive income and pay off my student loan debt?

3)What should be my timeline to grow my passive income to where I can retire by say age 40? (I am 25 right now)

I appreciate any advice and hope to connect with more people on here to grow my net worth. Please feel free to suggest areas where I may be able to buy 2 or 3 investment properties as I will be looking around the middle of next year. Thanks for the help and happy early Thanksgiving to all those that celebrate!

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David Thompson
Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
10y

Hi Ryan

You are in CA, from Ark and interested in Austin. Any particular reason Austin is your target? I think MF is a good place to start but there might be better cash flow cities to look at in TX right now. If you look outside the city and in the paths of growth, we are seeing MF opportunities emerging along the I35 corridor starting in NE San Antonio, towns like Selma, Universal City towards New Braunfels, San Marcos. Demographics fit MF well here. New power centers are popping up. This is not a new story as it seems everytime I drive the 1hr between Austin to SA....I can't tell wh r re one town status and stops any more. People are moving out of more expensive Austin and commuting further to get to jobs or jobs are moving there. Amazon bldg big distinct for instance just outside SA along this corridor to hot both cities w it's 2hr delivery model. This is a long term play that I believe you can count on.

IMO...If u can get a job down here, lower your cost of living, save $, clean up your credit, and and learn the market...it will get u a lot closer to your goal.

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  • David Thompson
    Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
    10y

    Hi Ryan

    You are in CA, from Ark and interested in Austin. Any particular reason Austin is your target? I think MF is a good place to start but there might be better cash flow cities to look at in TX right now. If you look outside the city and in the paths of growth, we are seeing MF opportunities emerging along the I35 corridor starting in NE San Antonio, towns like Selma, Universal City towards New Braunfels, San Marcos. Demographics fit MF well here. New power centers are popping up. This is not a new story as it seems everytime I drive the 1hr between Austin to SA....I can't tell wh r re one town status and stops any more. People are moving out of more expensive Austin and commuting further to get to jobs or jobs are moving there. Amazon bldg big distinct for instance just outside SA along this corridor to hot both cities w it's 2hr delivery model. This is a long term play that I believe you can count on.

    IMO...If u can get a job down here, lower your cost of living, save $, clean up your credit, and and learn the market...it will get u a lot closer to your goal.

    1Reply
  • Gene Livingston
    Investor · Kyle, TX · Member since 2015 · 113 posts · 102 votes
    10y

    I agree with David above. He's naming the right areas to become familiar with; I'd add Schertz to the list..the location of the new Amazon distribution center. The corridor between San Antonio and Austin is very interesting to me right now.  Austin itself is a story that everyone on the planet is already aware of.  I used to frequent Austin in the 1980's & 90's (see the movie "Slacker", the 1991 film by Richard Licklater, to get a feel of the classic Austin). It's an Austin that frankly no longer exists.  Where you CAN get that vibe is San Antonio. If you want to be a step ahead of development, you might want to consider investigating San Antonio, for the reasons stated.

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  • Ryan Jones
    OP
    Real Estate Agent · Snohomish, WA · Member since 2015 · 2 posts · 0 votes
    10y

    Thanks for the advice, seeing as my credit score isn't the best I was looking for areas with some tech that have a high growth potential. Around FT Hood I have seen quadplexes going for around 120k or so. I would be able to buy these outright or at least with a small loan in which someone in my family might be able to help me out with.

    I didn't see the bay area as a viable option, because I can't find a multifamily here without taking everything I have as a %20 downpayment on one house. Arkansas is still an option, but has less tech so when the recession hits again I believe it will be really slow to recover. Apple is building their second largest campus in Austin as well which is really good to know.

    Another question I have is, should I tap into the equity on my house to buy a multifamily? Or should I sell it outright and not worry with it anymore? I have one lot with a house on it and the other is barren land. I dunno if it's possible to appraise it together since they're kind of a package deal. Any help on that would be greatly appreciated.

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  • John Cohen
    Rental Property Investor · Mineola, NY · Member since 2014 · 838 posts · 212 votes
    10y

    @Ryan Jones Starting early is the best thing you can do. Stick to the multifamily idea. Would love to set up a call and talk real estate if you have some time. 

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  • Paul Thompson
    Investor · Little Rock, AR · Member since 2015 · 130 posts · 119 votes
    10y

    @Ryan Jones

    Congrats on thinking about investing so young and welcome to the community. It's a little unclear on where you are going to live. Do you know yet? I strongly suggest investing in the area you are going to primarily live and/or work. I have a rule I will only invest within 1 hour's drive of where I live.

    I'm trying to branch out into MF myself and haven't found a deal that meets my criteria in my area thus far. 

    In your situation the single greatest advice you can heed is to control your spending, save, and get of debt. And I mean make it your mission to save and payoff that debt. And I mean seriously save (in the order of 50% of your income). Let's say you make ~60K/year then in reality you're AGI will be ~$45K/year. So find a way to live off of $22,500/year. This is your single greatest lesson to take with you before you get used to starbuck's lattes, high lease car payments, mortgage payments, and designer clothing. Oh how I wish I would have learned that lesson sooner. Otherwise you will be shackled to you job and that income for 40 years. These will be soul searching kind of sacrifices but if you choose to accept and execute the challenge and educate yourself and make shrewd, safe investments you can attain financial independence by the age of 35. Maybe even 30.

    Think about it...

    I'm 38 and now just learning the power of these kind of decisions and I'm hoping I can attain financial independence by 50 because I've created a lifestyle that assumes/requires a certain level of expenses. 1 mortgage, 2 car payments, 2 kids, a decent amount of driving, insurances and having trouble of finding ways to cut expenses any further without becoming a pariah to my family. I'm doing some soul searching now. Let me tell you it isn't easy. Do it now, later or never. It's up to you.

    Real Estate is a means to an end (and a good one when used correctly). What are your goals? what are your values? Once you know those then choose, create your plan, and see where real estate investments fit into that plan.

    Best of luck and wishes of great success

    Paul

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  • Mark Nolan
    Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
    10y

    @Ryan Jones

    Welcome to Bigger Pockets community. Be sure to check out “Learn” for all kinds of useful resources and free how to guides.

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