My name is Jake Stimmel and I'm a senior in Biology at ISU, but living in the Champaign/Urbana area. I've had an interest in REI for a long time now, but didn't feel I had the know-how or money to get started. I started listening to the BP podcast a few months ago, and -after getting sucked into the rabbit hole of the BP forums and loving all the great content out there - I am getting a game plan together. I'll be starting dental school in about a year, and my plan is to house hack a small multi-family for 4 years of dental school. From what I've read it's a great way to get started and it really resonates with me. The other idea I've been tossing around is being a part-time wholesaler in the Bloomington/Normal area over the next year while I finish up school. That way I'd be a little more seasoned in the RE world when I start house hacking. I'm just not sure it's the kind of thing you can be successful at with only 10-15 hours/week. Any advice would be appreciated!
I can't wait to meet other like-minded investors and contractors in the area and to share ideas! Thanks everyone!
Hello @Jake Stimmel and let me be the first to welcome you to Bigger Pockets. BP is a great place to learn about the real estate business. BP has a ton of great information on REI and even has it's own podcast in itunes. You came to the right place and I wish you all the best.
Thanks @Steven Butala for the warm welcome! The podcast is actually what got me hooked on the site; I've learned so much in such a short period of time thanks to Josh and Brandon.
Welcome to Biggerpockets @Jake Stimmel
Thanks @Marlon Wilson . I'm enjoying everything there is to offer here!
@Jake Stimmel I think that house hacking a multi-family unit during Dental school is a great idea. In my opinion, the more units you can muster the better. More units obviously means more work in the long run, but it also averages out costs and makes things overall a little easier.
I think wholesaling is a good way to get started -- you'll definitely learn about contracts and working with the different players involved in the industry. If I were you, however, I would make an effort to work alongside someone with experience in the area of your long term goals (i.e. flipping, multi-families, single family rentals, commercial, etc.). IMO, this is more valuable early in your career than a few thousand extra dollars. Good luck!
Thanks for the advice @Aaron Ormiston . Wholesaling would definitely be a place holder for my true goal of developing a large buy-and-hold portfolio. I agree that finding mentors and other successful investors is the key to my long-term development. That's one of the great things about BP; it's easier now than ever to connect with other investors. Thanks again!
House hacking! I'm definitely a big fan of the strategy. My husband and I moved into a 4-plex we own when I took a 32% pay cut. Right now we're living in half a duplex for free with tenants beside us. Its a fantastic way to build wealth, either by building a real estate portfolio, or through living for free and investing your extra money. Let me know if you have specific questions or are looking at properties and need help with the numbers. Good luck!
Hi Jake - I agree with the comments above, house hacking is a great way to get started in real estate and will give you great practice on being a landlord. It will also tell you if you have what it takes to be a landlord and continue down that path.
My wife and I are currently house hacking our 2nd 3 flat and for us, it was the best financial decision we've made so far.
Let us know how it goes!
@Ayodeji Kuponiyi Thanks for the recommendations and hyperlinks; I'm doing all of the above and really finding a lot of value!
Thanks so much for the message Louise! It was very sweet of you to reach out. I'm very excited about the strategy, and from everything I've read it's a great strategy for new investors to get their feet wet. There is one issue I'm fighting with. The town I'll be investing in is mostly blue-collar with a lot of C areas, some B, and almost no A. There are 4-plexs available for around 120K, but I'd be in a C/C- area, whereas there are duplexes in the B area for around 80-100K. I would have higher cash flow with the 4-plex, but I'd be in a rougher neighborhood with more headaches. With the duplex the cash flow would be lower, but I would probably experience better appreciation. My question is which situation is more manageable?
Thanks for the candid advice. I can't wait to get started. I'll let you know how it shapes up!
Did you end up doing most of the service calls and maintenance yourselves or did you hire a PM straight away?
@Jake Stimmel Hi Jake - fortunately so far we have not had many issues come up. The ones that have, we'd done the majority of the work but we've had to have professionals come out once or twice.
We do not have any plans on hiring out a property manager as right now we do not have enough units to justify it. Our 2nd property is literally 1 mile away and a 10 minute drive. I feel like if we were hiring that out we shouldn't be in this business.
Hey! I would definitely stick to the duplexes in the B areas for $80-100K. What would your rents be on those? The other properties will cash flow more, but you work hard for your money. If you're just getting started out, its smarter to stick to better properties in better locations if you can afford to. Then you'll invest for the long haul and not hate your first property and never buy again! What are you thinking?
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