I’m currently 20 years old starting out in this real estate game. I have been getting mentoring as well as advice from an experienced investor, although at times I become frustrated because I still don’t have my first “Deal” I know I have to keep going because something is going to turn up. As a young investor I don’t have the financial backing that I would love to have, but then again that’s what we love about real estate investing, because it gives chances to those individuals who don’t have anything. I was just curious to know what you seasoned investors could pass on to a “young investor” such as my self as well as others out there who are doing it. What were some of the things that held you back? I would also love to hear from any young investors with some of there experience as well as how they started out?
We are in the EXACT same situation, even the age. However, I am already looking for deals and doing some marketing in wholesaling. The only thing I would recommend is to keep reading this amazing forums (i.e) flippinghomes.com, richdad.com, some yahoo groups, and this one, or any other that you might find useful. Even the most over asked questions that I have posted have been answered through this forum. Also, I have done some past failed business’, and the one thing I can say is “TRY TO BE PATIENT”.
-Edgar
same situation here… only i’m 22. i am still in search of my first deal. all i can say is learn learn learn as you search for that deal. and dont try to blaze new trails. veterans have already done all the hard stuff… just follow their proven systems… work smarter not harder. and when i say follow their systems… do it down to the last detail. i almost closed on deal i was gonna rehab with all my financing from borrowed money… which is fine. but i hadn’t studied enought yet and almost entered a deal with my asking price at about 86% of ARV… luckily i continued to study as i was out there working and i saved myself from some big headaches in the future. so yea man… follow what you learn from those who have done it. and just like Edgar said be patient…
Stick and stay and you will get your pay!
Hey thanks for the reply Edgar and Sdavis, much appreciated, this really motivates me more knowing that there are young investors just like myself going through the same things as me, and trying to stay in this game. is their a team that you guys are working with?
Markus
Well, let me start by asking you few questions and hopefully by the time you answer them you may find out what you need to do. But first, let me say that being in your early 20s tells me you have no business or management experience. I strongly believe that real estate is a business like any other business and you must approach it as such.
This is not a part time hobby, not get rich quick, and majority fail doing it otherwise, we would have 10s of thousands of investors in every city. So keep that in mind and start working on systemizing your processes/business. You may not understand what I am talking about yet, but keep it in mind and as you grow in this business you will start recognizing the need.
First of all, why do you think you have not found your first deal?
Second, once you find and do your first deal then what? how does that solve the issue of having to find few of them a month?
Since you mentioned no or little money to invest, how do you plan to finance them? holding costs? repair costs?
First deal is the key, but you need to think beyond first deal. You need to start thinking about identifying what you do not know and work on figuring it out. Not a simple process and will take long time.
For me, I see four critical aspects to investing:
- Locating Properties - Marketing
- Negotiating the Deal - Negotiation Skills
- Rehab/Maintenance - Fixing the property/contractors/days on market
- Selling the house - How to move the property/exit strategies…etc
Sounds like you guys have not figured out the first point and until you get the first point nailed down, you won’t have the experience needed to solve the second one. Once you get your first deal, you will realize what it takes to do 3 and 4.
On your second deal, you improve your processes and you become better at it.
Great advice. I feel you may have assumed a slight bit too much based on the little bit of info we gave in our posts. However, I agree with the things you said. We will get there if we are ready. To be perfectly honest I don’t feel that age matters. I know 40 year olds who still don’t have their heads on straight. We will get where we need to be eventually. It should be applauded that we are even thinking about our futures. I can’t speek for Edgar and Mark but I’m not here for a quick buck. I’m here for financial freedom for my wife and our future children. I’m here to create business systems that run on “auto pilot” and continuously spit off cash flow. I’m here so that my future luxuries can be funded 100% by my cashflow from assets. I’m here take full advantage of the opportunities available to me. Money will work hard for any age boss… 20 or 50. I don’t need to wait until I’m 40 to understand that. What I lack in experience, I will make up for by being coachable. Thanks for the info once again. I take it in just like we take in food. I’ll take the nutrients from it and release the rest only to search for more food. That right there plus the upcoming experiences we will face will give us the learn knowledge and activity knowledge we need to succeed. No age requirements.
nevermind
If I misunderstood something I’m sorry. I thought you were trying to say we can’t be ready because we don’t have experience. Don’t just quit on the advice because of my comment please.
No, that was not what I was saying. What I wanted to say is that you need to approach Real Estate Investing as a business and since you all are around the age of 20, it would be safe to say you have not been exposed to proper management or business running skills. Heck, most investors are not either at other ages as well.
If you track successfull investors, or successful business owners you will notice how structured they are. Otherwise, how can a business owner step away from work on vacation yet their business continue to operate as if they are there?
For me, real estate investing is just another business model that uses houses as a product to buy and sell. So you need to look at how to setup a marketing system that would get you consistent leads. You need to be able to forcast how leads and deals in the future based on patterns in your business.
For example, lets say you found your first deal. now what? did you find the right formula to repeat it next month? can you double that same effort and know more or less you can get double the results? or was it a fluke?
When you are starting, you will feel lost and you will not have these answers. Just try to keep track of them and learn from patterns you notice in the business.
How did you develope your system when you started out? Did you just meticulously keep track of what you did to succeed with each deal and learn what works and what doesn’t work? I would say I have a plan honestly… I just have no idea if it’s going to work lol.
I’ve found that it’s kind of hard for me to come up with a system to use because each property I find makes me want to enter a different part of real estate. For example, I found a place I want to wholesale… I also found a place I want to flip. I’m sure i can do both. I just want to avoid becoming a jack of all trades and a master of none.
Did you focus on one specific area in the beginning? If so what area? My friend is focused on wholesaling and I am determined to flip a house with money from a hard money lender. Did you ever borrow from a private lender?
Also, how fast can a system be developed? I am active duty US Army and sadly enough, I’m headed to Korea in 2 months (better than my last 2 trips to Iraq). But what can I do from out of the country? Is there any way to set up a system or at least find a way to make money in real estate with me being out of the country?
Thanks!
I did not start with a system and it took me over a year to develop it by reading and following systems placed by other investors. I am by no means there yet either. I am still working on it and improving where ever I can. I actually detailed my experience in my blog in my signature.
My marketing system is currently based on $Cash$'s and Paul’s guidance, both members here.
My negotiation skills came from my normal job, Michael from MyRealtyData, and $Cash$.
My closing process for buying and selling was simple one, just found an attorney who was glad to do my closings due to the volume I have been sending him
My selling system is turning out to be almost a copy of another guru, although I have not perfected it yet.
What is funny is that when I first started, I wanted to put together a marketing and business plan. I had no clue what to put in it because, like many, I had nothing to base it on. At that time I recognized that I am missing lots of knowledge in this area so I started to figure it out and solve the puzzle.
well i think i have down the basic format on how i’m going to need to set up a system. i got my information from plenty of books, articles, and people on sites like this. but ofcourse that only gets you so far. i know for a flip i’m going to need contractors. but as far as actually getting them and knowing if they can do a good job or not is still a blur you know? i’m thinking the only way for me to get my foot in the door forreal is to come up with the BEST system i can just based on learn knowledge with no activity knowledge. then once i actually have a property or two and experience some thing… i can adjust accordingly based on what the real world deals me. hopefully it doesnt take too long that way.
Once you do couple of deals, you will notice a huge difference… nothing like hands on experience 
as far as contractors goes, network with other investors and ask for referrals… but be warned, there is no such thing as a good contractor in the past two months, two seperate contractors not related to each other, give me the execuse that their truck was stolen and that is why they did not show up to the job site when I was out of town for a week.
oh wow that sounds like a load of bull. I’m almost wanting to get properties that only need a little bit of work and doing the work myself. with me being active duty Army… i dont know if i have time for that 