College graduate looking to start real estate investing

Investor · Iowa City, IA · Member since 2017 · 137 posts · 85 votes

Hi Andrew, welcome to BP. Sounds like you are well on your way - without even having started yet!

I think for your life stage and experience the house hack or BRRRR strategy could be a great thing.

It also sounds like you are an intelligent guy given your experience and education. Perhaps you could think about your goals over the next 5, 10, 15 years? For example, maybe you house hack a house, but then you use that capital and the cash from your job to find deals and have others do the work?

One lesson I have learned from BP is where to put my time. I could do flips and rehabs myself and make more money per deal. However, I think my time is better spent thinking about my business and looking for the next investment.

Not sure if that makes sense, but that's my take. I'm sure you are well read in the REI category, but there is so much good stuff out there. Best of luck!

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Andrew Lentz

OP

Member since 2019 · 2 posts · 2 votes

7y

I think you bring up a good point on where to spend my time for first few years I am leaning towards house hacking if I can find a property that would work well. As I get more into this real estate investing I would look to hire more work done and maybe only do labor that I save a great deal on and doesn't require much time.

Is there anything as far as a first time home buyer loan that I may qualify for if I went with a duplex or multi-family? I just don't want to miss out on anything that may be on the table.

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Account Closed

Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes

7y

@Andrew Lentz

I'm not sure what your experience is in Corporate America, but you might want to allocate some of your mental bandwidth for adjusting to this brave new world you are about to enter. I grew up on a family farm (dairy, Upstate New York) and started my professional career as an engineer (electrical). Although I've never done any house hacking, I'm still used to the idea that when you need to get something done, you just go ahead and do it.

In Rural America, you are the captain of your own ship, even if your "ship" is a row boat in a duck pond. A very small company is even exempt of OSHA because management and labor are pretty much one and the same. The world of large companies are quite different (for good reason). Management and labor are separate. The "ship" is a much larger ocean-going vessel and you are likely never to be the captain. I never adjusted to it even after I went to business school part-time taking evening classes to learn how Corporate America works.

House hacking could be your safety-valve escape if you get caught up in the situation. A co-worker of mine showed me the extensive remodeling he did to his home when he worked for an impossible boss earlier in his life. Carpentry was his way of coping with job stress when he was not at work. As an engineer, you are likely to be classified as an exempt employee, which means you get to work overtime without being entitled to additional pay. In slow times, employers are likely to demand this commitment. During the semiconductor recession of the 1980s, for example, the chip company Intel featured the "125% solution" where its engineers had to work 10 hours a day for 8 hours of pay (perfectly legal). Those who arrived to work after 8 AM had to sign in at the front desk and their names were sent to their boss. Harsh perhaps, but tech jobs in the chip industry at that time were hard to find and those who had them put up with the harshness.

As other posts have recommended, you might want to think through how you want to spend your overall time. The good news is if you find yourself unable to put up with the bulls***, you'll have an incentive to figure out how you can F.I.R.E. and be your own boss again in your own small-pond world. If you don't know about this resource yet, check out Mr. Money Mustache, a software engineer who retired early because he and his wife were able to become financially independent at a young age. He was also interested in real estate and built the home where his family lives.

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Justin WindhamPro Member

Banker · Nationwide · Member since 2015 · 4k+ posts · 1k+ votes

7y

@Andrew Lentz

Welcome to Bigger Pockets!

You'll find plenty of friendly, knowledgeable people willing to respond to your posts. A lot of forum members are experts in their respective fields related to real estate investing, whether that is real estate sales, wholesaling, flipping, buy and hold investing, lending, self-directed IRA and Solo 401k investing, or tax and legal guidance.

There are some pretty nice discounts on many products and services offered as Perks to BP members that you might want to check out: https://www.biggerpockets.com/perks/pro

If you haven’t been to it already, the Bigger Pockets blog features links to their fantastic podcast and many great articles: https://www.biggerpockets.com/renewsblog/

The site has quite a few tools that can be helpful for new members. For example, if you are looking to connect with other members near you, want to learn from people in a specific area you’d like to invest in, or have a desire to find people interested in certain topics, you could use the search feature here: https://www.biggerpockets.com/search/users

I really like the alerts feature that can quickly guide you to current topics that may be of interest: http://www.biggerpockets.com/alerts

There are a few self-contained guides that you can access here: https://www.biggerpockets.com/guides

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Zach White

Rental Property Investor · Collingdale, PA · Member since 2018 · 12 posts · 5 votes

7y

@Andrew Lentz

House hacking is a great way to get started no matter your situation. My wife and I house hack and it allows us to save over half of our income whereas we might only be able to save a couple hundred dollars a month otherwise.

But before to dive in, definitely listen to some podcasts and check out the books published by Bigger Pockets so you know the obvious pitfalls and how to analyze potential properties for cash flow after maintenance and cap x.

So if you're willing to take the time to learn the basics, house hacking can certainly set you up for financial success and give you a taste of REI so you have a little experience if you choose to peruse it further in the future.

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James Wise

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes

7y

Originally posted by @Andrew Lentz:

I am graduating this May with a degree in Mechanical Engineering. I am currently looking for a full time job in North Dakota, South Dakota, Nebraska, Iowa, Minnesota, and Kansas. Currently I have a strong lead on an ideal position in Salina, KS. I have some real estate experience from my family. My parents bought a 3 bed 2 bath foreclosure and I did a majority of the work to remodel it. They rented it out for about 5 years and now they currently have the property listed for sale. My mom also bought a sheriff sale property that I did all the remodel work on myself. It is a 3 bed 1 bath house that is currently rented out.

My reason for getting into the real estate market is to increase my disposable income. I am an avid bow-hunter and would like to purchase a quarter to half section of land to manage for wildlife and rent out some acres for tillable ground. I have experience dealing with farmland as I grew up on our family farm and still help out when I am home on the weekends from school.

Wherever I find a job I am interested in getting into the real estate business. With my degree I should have around $30,000 of disposable cash every year. I have worked my butt off to graduate school without a loan and would like to operate without too large of a loan. I will be saving as much as I can for the first year of my job in hopes to use the cash to put towards a real estate investment. I am considering a few different options to get into the market. I am looking at House Hacking, Rentals, and maybe flipping houses. I have tons of experience within the construction industry so a fixer upper would be a great fit. I can do drywall tape and texture as well so that will further decrease costs of a rehab. I have looked at houses available and found a few for under $40,000 that I could rehab and rent out for $600 a month. I would like to hear others opinions on where to begin my real estate investing. Is there any program I should take advantage of for my first investment. First time home buyer? With something like that maybe I save for 2 years and try and find a multi-plex and live in one unit.

Thanks for any info,

Andrew

Welcome aboard Andrew.

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College graduate looking to start real estate investing

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