24 y/o with $120,000.00 --> Need advice

24 y/o with $120,000.00 --> Need advice

Member since 2023 · 10 posts · 6 votes

Hello everyone,

I’m Ethan, a 24-year-old real estate agent in the Greater Boston Area with just over $120,000 saved. I’m seeking advice on my next steps in real estate investing and would greatly appreciate your insights.

Currently, I work with landlords who use the rental buy-and-hold strategy. I am primarily a rental agent so I am very familiar with the LTR model. I’m considering purchasing a rental property in Southern New Hampshire due to the more affordable multifamily options compared to Boston. However, I’m also contemplating learning the flipping business, either by working with a flipper or trying it myself, to generate a larger cash position.

I’m open to the idea of out-of-state investing but would approach it conservatively. My primary question is: Should I focus on buying a multifamily property and growing slowly to build a stable financial foundation, even though my area would have minimal cash flow and be more of an appreciation play? My income is variable but typically around $130,000 annually, with a 60-70% savings rate.

I’m just starting out and eager to learn, so any advice, experiences, or strategies you can share would be incredibly helpful.

Thank you in advance for your insights.

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
Quote from @Ethan Piani:

Hello everyone,

I’m Ethan, a 24-year-old real estate agent in the Greater Boston Area with just over $120,000 saved. I’m seeking advice on my next steps in real estate investing and would greatly appreciate your insights.

Currently, I work with landlords who use the rental buy-and-hold strategy. I am primarily a rental agent so I am very familiar with the LTR model. I’m considering purchasing a rental property in Southern New Hampshire due to the more affordable multifamily options compared to Boston. However, I’m also contemplating learning the flipping business, either by working with a flipper or trying it myself, to generate a larger cash position.

I’m open to the idea of out-of-state investing but would approach it conservatively. My primary question is: Should I focus on buying a multifamily property and growing slowly to build a stable financial foundation, even though my area would have minimal cash flow and be more of an appreciation play? My income is variable but typically around $130,000 annually, with a 60-70% savings rate.

I’m just starting out and eager to learn, so any advice, experiences, or strategies you can share would be incredibly helpful.

Thank you in advance for your insights.

If it was me I would stick with owning over fix and flip. I recommend connecting with @Andrew Freed and others in the area who run REIA's and meetup groups etc.

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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    2y

    I'd encourage you to talk to a CPA before choosing a path.

    Since you are already an agent, the odds are good you could qualify as a real estate professional status (REPS) for tax purposes.  If you qualify for REPS and own rentals, you unlock tons of tax benefits.  On the other hand, flipping is considered a trader business and taxed at one of the highest rates.

    I have a feeling this is a no-brainer decision when you factor that in.  On top of that, you already understand the LTR business.

  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y
    Quote from @Ethan Piani:

    Hello everyone,

    I’m Ethan, a 24-year-old real estate agent in the Greater Boston Area with just over $120,000 saved. I’m seeking advice on my next steps in real estate investing and would greatly appreciate your insights.

    Currently, I work with landlords who use the rental buy-and-hold strategy. I am primarily a rental agent so I am very familiar with the LTR model. I’m considering purchasing a rental property in Southern New Hampshire due to the more affordable multifamily options compared to Boston. However, I’m also contemplating learning the flipping business, either by working with a flipper or trying it myself, to generate a larger cash position.

    I’m open to the idea of out-of-state investing but would approach it conservatively. My primary question is: Should I focus on buying a multifamily property and growing slowly to build a stable financial foundation, even though my area would have minimal cash flow and be more of an appreciation play? My income is variable but typically around $130,000 annually, with a 60-70% savings rate.

    I’m just starting out and eager to learn, so any advice, experiences, or strategies you can share would be incredibly helpful.

    Thank you in advance for your insights.

    If it was me I would stick with owning over fix and flip. I recommend connecting with @Andrew Freed and others in the area who run REIA's and meetup groups etc.

    7e investments53 Reviews
  • Member since 2024 · 1k+ posts · 351 votes
    2y

    If you want to scale quick do JV and in a few years you will have jumped 5 years in REI

  • Member since 2024 · 1k+ posts · 351 votes
    2y

    See if you can get to Facebook groups in  your area and also Meetups and get the network broadened so that you can scale quicker than if you are not pro active.. my 2 cents

  • Patrick McCannPro Member
    Realtor · NH · Member since 2022 · 112 posts · 59 votes
    2y

    First off congrats on setting yourself up to be in great start position at a young age! I do think southern NH/seacoast are great markets to invest in with potential for cashflow and high appreciation along with very low vacancy. I grew up in southern NH and now live in the seacoast area where I invest, recently licensed in NH as well.

    What is your current living situation? Have you considered house hacking a small multi? For perspective I purchased a duplex in late 2022 using an FHA loan for 444k that I've been rehabbing while living in it as well as renting one unit, once the rehab is complete this summer comps are showing I'll have roughly 200k in equity to tap into. BRRR deal could get you the cashflow and the value add payout without having to pay capital gains on the equity.

    If you’re not fatalist with the Multifamily Wealth podcast with Axel Ragnarson I’d highly suggest checking it out. Axel is a young guy living in Boston that invest in NH with a ton of multifamily knowledge.
     

  • Member since 2023 · 10 posts · 6 votes
    2y

    Thank you for your response!

    I am currently in a lease that ends in August 2025. I'm very interested in house hacking and particularly like the idea of a live-in flip, especially with a multi-family property. My main concern is the limited cash I have available for the down payment and renovation costs. The prices of multi-family homes are just high enough to pose a challenge. I think the BRRR strategy would be an excellent option as it provides several positive exit strategies. Would you recommend bringing in a partner to help with capital and construction costs in exchange for equity in the property?

    I will definitely check out Axel's podcast. Thanks again.

  • Patrick McCannPro Member
    Realtor · NH · Member since 2022 · 112 posts · 59 votes
    2y
    Quote from @Ethan Piani:

    Thank you for your response!

    I am currently in a lease that ends in August 2025. I'm very interested in house hacking and particularly like the idea of a live-in flip, especially with a multi-family property. My main concern is the limited cash I have available for the down payment and renovation costs. The prices of multi-family homes are just high enough to pose a challenge. I think the BRRR strategy would be an excellent option as it provides several positive exit strategies. Would you recommend bringing in a partner to help with capital and construction costs in exchange for equity in the property?

    I will definitely check out Axel's podcast. Thanks again.

    I think you have a pretty good cash position for that strategy actually. Utilize a 5% down conventional loan say on 600k small multI family that needs some work but is livable and financeable and that’s 30k, leaves you a good buffer for construction cost and reserves. I like the 5% conventional over fha because you can drop pmi once you have 20% equity without refinancing and the appraisal inspection requirements on condition are less strict. Could be tough to find within Boston but surrounding areas possible. Probably not great cashflow but the appreciation will make up for that and in time it will cashflow better. 

    I actually got a message today about a meetup next Tuesday in Beverly MA from a friend in real estate in mass of you’re interested in more details. 

  • Member since 2023 · 10 posts · 6 votes
    2y

    Great advice. I agree with the conventional loan over the FHA. As you said, the difficult part would be finding the property within the price range.

    I would love more info about the Beverly Meetup.

  • Real Estate Agent · Boston, MA · Member since 2016 · 446 posts · 214 votes
    2y

    @Ethan Piani having that much money at 24 saved up is amazing! Here are some ideas for how to spread your money out and keep you in a strong financial position for future investing:

    1. House hack a multi with a low down conventional or FHA loan in MA. Even at a purchase price of $1 million in the Boston metro, that's only like $50k plus closing costs versus using all your money on one deal. The other advantage here is that you're an agent so you can represent yourself and recapture some cash if you buy in Massachusetts.

    2. Continue crushing it as a rental agent and saving up. If you aspire to be a landlord, you're going to know the ins and outs from understanding this perspective. Plus making $130k consistently makes you very lendable from that perspective compared to trying something new (trust me, I've been in that boat).

    3. Talk to people and research the strategies you're interested in. You might find that multi is a better fit for you, but you might find that flipping is more conducive to your skillset/goals. I wouldn't put the remainder of your cash out until you have a concrete direction to go-- you'll be gaining a lot of experience as a landlord house hacking. These will be great data points to inform your strategy.

    Good luck!

  • Rental Property Investor · Elmira NY · Member since 2023 · 143 posts · 143 votes
    2y
    Quote from @Ethan Piani:

    Thank you for your response!

    I am currently in a lease that ends in August 2025. I'm very interested in house hacking and particularly like the idea of a live-in flip, especially with a multi-family property. My main concern is the limited cash I have available for the down payment and renovation costs. The prices of multi-family homes are just high enough to pose a challenge. I think the BRRR strategy would be an excellent option as it provides several positive exit strategies. Would you recommend bringing in a partner to help with capital and construction costs in exchange for equity in the property?

    I will definitely check out Axel's podcast. Thanks again.


     Is your buyout for your lease reasonable? I ask because sometimes you end up saving money very quickly even if you have to pay a 2 months penalty or something like that. Its a short term pain that ends with a long (not even to long) term profit from my experience. 

    The one thing ive learned in my short time of real estate investing is look at the bigger picture and from multiple angles. And if you are single and no kids house hacking seems to be much easier in that time of life v. when you might be more worried about others being close by to your family. 

  • Member since 2023 · 10 posts · 6 votes
    2y

    Fortunately, my current lease doesn't include a buyout clause. The location is fantastic and conveniently close to my market. However, if I were to purchase a property, I'd face a minimum 45-minute commute, which is impractical for a ~10-minute showing as an agent. I've also considered modular multifamily homes since they generally cost less and would reduce my capital expenditure concerns. The only barrier is finding the land. What are your thoughts on this approach?

  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    2y

    @Ethan Piani

    To make a smart choice in investing, think about cash flow, value growth, and your know-how. Look at Southern New Hampshire's good prices and cash-making chances for buildings with many homes. Flipping homes can make money fast but needs different talents. Study the market, get a local group together, and begin small. To manage risks, keep some cash saved, spread out your investments, and keep up with market moves.

    Good luck!

  • Member since 2024 · 15 posts · 6 votes
    2y

    Hey Ethan, I'm also a MA investor I bought my first property a month ago about an hour south of Boston (where I am from). I'd recommend doing owner occ so that way you don't have to use most of your savings to buy the property, you could put down 3-5% instead of 20. I also have worked for a flipper and work in construction and if you have no construction knowledge it would be challenging but not impossible. Also something worth noting is New Hampshire has higher property taxes. If you want to avoid Boston prices but work in Boston I'd recommend finding something as far away as you're willing to commute, live in one unit and rent out the others. If you want to pursue flipping you could start off small with something that needs updating and general repairs rather than a massive flip, that is what I am currently doing. Hope this helps!

  • Member since 2023 · 10 posts · 6 votes
    2y

    Thanks, Michael! How is the learning curve with flipping? I have never worked on one but would be open to something small. Do you think it makes sense in the current MA market?

  • Member since 2024 · 15 posts · 6 votes
    2y

    It's tough for me to answer on a learning curve question I went to high school for architecture and college for construction management and I've never personally flipped a house, although I know how to budget and schedule it. It's up to you but flipping is obviously more risky... also depends how handy and knowledgeable you are, if you aren't able to do things yourself you need to budget for labor costs... on top of holding costs and material costs. I am sure it is possible to do well on a flip but most stories I hear people take anywhere from 6 months to 2 years and on their first barely break even because they are learning.

  • Investor · Campton, NH · Member since 2010 · 284 posts · 142 votes
    2y

    Hi Ethan, on FHA BRRR acquisitions you can buy up to 4 units and one of my mortgage brokers has grant money left over from last year. to go toward your 3.5%down and closing costs! I can share her info with you if you like......

  • Member since 2023 · 10 posts · 6 votes
    2y

    Hi Richard! That would be great! Feel free to PM me.

  • Realtor · St. Petersburg, FL · Member since 2024 · 55 posts · 40 votes
    2y

    Hey Ethan,

    Congrats! It seems like you are totally crushing it as an agent! Keep up with that!

    I would start with a house hack and continue to grow down that avenue and purchase one every year. If you are willing to stay in a property that needs some work that is awesome, you can buy a value add home, continue to live inside, and renovate at the same time. 

    I would then take the remainder of your savings as you continue to work and invest in multi-family properties. 

    Being an agent gives you a good edge also since you are in contact with owners constantly and I am sure you are very familiar with properties and locations in your area!

    Good luck!

  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Ethan Piani

    house hack or live in flip first.

    low down payment options should give you the ability to buy something in a higher price range.

    buying in southern new hampshire is a great idea - it's an "out of state" market that's close by - but you're just not going to get any meaningful return on it in the short term.

    what am i missing?

  • Member since 2023 · 10 posts · 6 votes
    2y

    One important thing to note is that I recently graduated from college in 2022, and my income for that tax year was approximately $40K (from May 15 to December 31). In 2023, my first full-time year, my income was $145K, bringing my total (2-year average) net income to about $85K. The problem I have is that even though I have reasonable savings and income, the lower income from the 2022 tax year is getting in the way of qualifying for a property that I can afford with my actual income of $130-145K.

  • Member since 2024 · 15 posts · 6 votes
    2y
    Quote from @Ethan Piani:

    One important thing to note is that I recently graduated from college in 2022, and my income for that tax year was approximately $40K (from May 15 to December 31). In 2023, my first full-time year, my income was $145K, bringing my total (2-year average) net income to about $85K. The problem I have is that even though I have reasonable savings and income, the lower income from the 2022 tax year is getting in the way of qualifying for a property that I can afford with my actual income of $130-145K.

    Find another lender I ran into the same problem not all of them average out your income, I noticed banks average out your past 2 years but mortgage companies do not I could connect you with my lender if you'd like
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    2y

    Principal broker 20+ years in commercial real estate. 

    Ethan likely best for you is to keep working capital to grow your book of business. Then eventually move up where you hold your license for better splits or go out on your own.

    Once you have solid foundation then start investing more.

    You did good saving up some money but if you buy the wrong investment could sink you for awhile.

    Example if I put 1 million dollars into a property that gives me 6% I make 60k a year. How much can I make putting 1 million into my business? I have not put that much in before but likely make 20x on that in 1 year. So you have to analyze active versus passive investments and how you want to allocate your time for your overall short and long term investing and career plans.

    Good luck

  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    2y

    You can househack in Boston area and use a renovation loan. With your level of liquidity, you shouldnt have an issues qualifying as long as you have 2+ years of consistent 1099 income. 

  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    2y

    @Ethan Piani - I definitely think househacking or JVing on a commercial multifamily is the play. Happy to offer advice if you have any questions. Best of luck on building your portfolio. 

  • Rental Property Investor · Wakefield, MA · Member since 2018 · 65 posts · 108 votes
    2y

    One good first move is to house hack a 2-4 multifamily property if that works with your current situation. Looks like you have a good healthy savings rate and make sure you set aside funds for both expected and unexpected expenses if you do house hack. Next move is to buy an investment property next, if you feel like you lack experience or needing more funds / resource to go after an investment multifamily property, then see if you can find a partner/s to JV. Let me know if you have questions and happy to help.

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