I’m a 23 year old recent college grad and I just joined these forums. I’ve been in the same job for around 7 years now and really just started making decent money (around 60K-70K this year).
I am looking to enter the world of property investment hopefully leading to financial independence around age 35. Why now? I recently graduated college and am engaged to be married in 2 years and will be moving out. I want my first purchase to be a wise one, that’s why I am here. I picked up a couple books on the topic:
2 Years to a Million in Real Estate: Matthew Martinez
Investing in Real Estate: Gary W. Eldred
Overall, I am not looking for any gimmicks, get rich schemes or programs, merely an understanding of how some of the successful members of this board made it from their first investment property to where they are today.
I’m open to hearing any and all suggestions you may have and if there are any mentors, local or not, looking to take a like-minded youngster under their wing, I’d love to be that guy. My fiance’s family is quite wealthy from commercial real estate, I believe their property holdings are in the 150 million range. My point isn’t to make anyone ohh and awe; merely to say my goals are different. My goals would be more along the lines of buy and never sell a property. Her father is a very smart man and I’m hoping he’ll help mentor me as well; however, he’s more into commercial real estate than residential. I’m not opposed to that industry; however, it’s not where I will start as I do not have the credit nor capital to do so.
So how have you guys done it? Purchased a multi-unit for your first and let others pay your rent? Single family home that is now rented? Single family home with a second mortgage to purchase your first investment property (this is the one the aforementioned books focus on, sounds VERY risky to me…)?
Overall, we’ll probably have around 100K to put down on a house and maybe another 100K in reserves for whatever comes up; either way, I want to be as educated as possible for whatever may arise.
At Gold River’s advise to another poster, I will answer the following so you all have an idea where I currently reside:
Your level of investing experience?
A bit in the stock market, no real estate.
Have you ever invested in Commercial Property?
No
How much cash do you have to put into Commercial Apartment Properties this year?
None this year, around 150-200K within the next 2 years but i will want to keep some at my disposal not to be tied up in property.
Do you have an established track record?
No, currently living with my mom
How is your FICO score? Terrible? Bad? Average? Good? Very Good? or Fantastic?
FICO is around 750 because of my age.
Do you have 2 plus years personal tax returns?
Yes, however, only 2012 will show a decent income.
How is your debt to income ratio?
I have no debt other than a car payment (loan balance around 18K)
Have you ever managed multi family properties before?
No
What is your current Profession?
Sales of Enterprise level Computer Equipment
Why do you desire to invest in Apartment properties?
Financial freedom, appreciating investments, passion for the industry, etc… A bit cliche but it is what it is.
What is your expectations working with an Apartment Investor Mentor?
I really don’t know what to expect, that’s why I’m chatting with you fine folks.
We started with a 6-unit apt building 4.5 yrs ago. We’ve been buying SFHs ever since…those are just the opportunities that came up. We’re rapidly approaching a level where we could work for ourselves and make it just fine in a few years. First purchase was actually completed by pulling money out on a credit card. It worked well for us. We didn’t really have any mentors specifically. We just tried to be realistic with the numbers and only buy houses that we knew we could make money on. I’m sure we’re not nearly as big as some of the other people on here, but I think we’ve done really well by starting from nothing a few years ago.
Thanks! Any info on the building you bought?
Why was it a great buy?
What % of FMV did you pay for it?
How did you find it? Did it need rehab?
was it immediately leased?
How hard was it for you to acclimate to being a landlord?
Was keeping the space filled and tenants honest an easy adjustment?
Where did you advertise for tenants? Do you still do all your own property management?
Sorry for all the questions, trying to be thorough!
6 units, all 1BR/1BA, around 425-450 sqft each. 2 were vacant and needed rehab at time of purchase. Bought for 51.5k. Put about 5k or so into it initially. Got everything rented. Total rent now is about 1300/mo. Building stays full. I only pay water (about 120/mo), common area electric (about 65/mo), and trash (31.90/mo). No grass to cut.
Property was listed on the MLS. It’s probably worth about 95-100k now.
The building had good long term tenants who pay on time so it was a pretty easy start to being a LL.
We advertised in the local paper.
I still do all of my own property management.
Am i in the wrong section here? thought i'd get more responses....?
You will find that, for the most part, these Forums are not about bragging and selling products and programs to “be like me”. The Forums are made up of tried and true business people who started out much as you are.
They are more than happy to discuss options and experiences, and the best part? It is all free.
Most just prefer to leave the “tooting of horns” to those that are hawking products.
Not too sure what you mean? I’m not asking anyone to “toot their horn” nor and I here to toot mine. I am merely looking for info as to how the successful and intermediate members of this board got to where they are. The one idea I would like to discuss with someone was the idea that 2nd mortgaging your residence to purchase an investment property is the best way to go. I spoke to my lawyer regarding this and he said he has had many customers filing bankruptcy by doing this vary thing.
Secondly, if your comment was an accusation toward me (sorry for misreading if it wasn’t) I am not tooting my horn, merely laying out what I have to work with and asking the pros how they’d use my investment to start out without making a “rookie” mistake as I’m sure that would be quite costly. Thanks for the response!
I don’t think Mdhaas was trying to acuse you of anything, but I think you will find more responses from a specific question, yours is so general in nature (and there is nothing wrong with that),that its hard to give an answer that doesn’t read like a book.
You want to read these forums, read books and try to find someone in your area (probable through a local rei club) that can help mentor you.
The advice your attorney gave you is good, unless you know what your doing, people just going out and buying properties without knowledge can really screw up, but it sounds like you are working toward getting the education on rei you need to make the right decisions.
You sound like you are building a good base for rei (good credit score, etc) What area of the country are you in?
Thanks for the reply! I’m in southern California. Anyone know any good REI clubs in the area? I’m reading the rest of these posts about 55K houses and it’s blowing my mind… You can’t buy ANYTHING for under 150K here…
I just started learning about real estate investing and already see that it can be very rewarding if you plan well and know the facts. Speaking of facts, I was reading about wholesaling and building a buyers’ list. I am told that building a buyer’s list is the first step to starting a real estate wholesaling investment business. :rolleyes
One of the methods that was suggested for building a buyer’s list is using a facebook ad (with a photo of a property) that links back to a website (squeeze page) where you capture email and names of visitors to that webpage. To make a long story short, my questions are: 1) Is this a good method to build a list for a newbie who has no property to show? 2) what happens when a click on my ad results into interest from a potential buyer?
Please help! I need to start building my list. I already signed up to attend my local REI Club meeting to network. :help
My opinion would be to start out with one investing method and just focus on that first. Doesn’t matter which one really, but you should realize that some methods may require more capital than others. It’s not always true, and I am pretty sure that there are ways to do all types of deals with none of your own money, but it seems to me that for some methods, those deals are few and far between.
Yannah,
in response to your first question, I can’t see why it won’t be. Perhaps just adjust the wording a bit. Instead of showing a picture of a property which you don’t have, state that you are “doing deals in the following area(s).” It’s still a truthful statement and anyone looking in that area will have their attention captured…well, hopefully anyway.
In response to the second half of your question, I can only see that you should be building strong contacts. I would get in touch with people directly and speak to them to find out their criteria. But, that I just what I would be doing…well, will be doing in the very near future.
One final idea, don’t forget craigslist. Look in the real estate services section, where investors sometimes post and look in under the “housing wanted.”
