Hi everyone,
Im a 22 year old in New York about 90 mins north of the city.
i live within 30 mins of 5 major colleges, and 5 other smaller private and community colleges.
ive been reading multiple books, articles, stories, lots of internet readings, etc for about a year and a half now.
im on 5-6 email lists for realtors, housing devlepoments, investments, HUD, etc.
on facebook ive joined multiple real estate, and investing groups.
one of my best friends is wanting to do real estate as seriously as i am
my plan in life is to be retired in the next 5-7 years from a day to day job
-i want to buy several houses and rent out to students (as im close to so many colleges and they always will need housing)
-after 2-3 years (in several different college towns and neighboring states)build several apartment complexes, hiring a property managment company for each
-build some 1-2 story strip malls that include :–
(tattoo shop, bar, beer/liquor store, ice cream parlor, pizza shop, barber, tanning salon, conveinent deli, etc
basically anything that caters to a college town)
-by this time i should have a substantial residual and passive income, so id like to start a business
-among some other goals
but since im young i would like a mentor/partner to help me along in this journey
any suggestions, and comments will be greatly appreciated
I recommend you go ahead and take action…buy a house!
If you don’t know what to do, either read a book, take a course or get help from an experienced investor to walk you through a few deals. Experience some smaller successes together and then move forward on our own.
Action with the right knowledge will fulfill on your goals.
thanks rob!!
my friend and i are currently looking at a house right now its a 7 bedroom 4 bath for just under 120k
its in foreclosure and needs a decent amount of work.
we will both be a first time homebuyer so we can probably get approved for an FHA loan. but we would like to get the
FHA “203k” loan that will put the renovations cost as well as up to 6 months of the mortage costs in the same loan for a slightly higher percentage rate
we would live in the house after renovations are completed and rent it out as quickly as possible to as many as 5 other students
as we are both young this seems like a better plan, since we dont have tons of cash and dont want to jump into hard money lenders just yet
i read about a medium sized book worth of information every week just to learn terms, laws, ideas, more knowledge in general
i am trying to find an investor around my area as im sure there has to be with so many colleges
thank you for the encouragement rob,
happy investing
Lee, be wary of too much book smarts and not enough street smarts. All those books and all that info can lead to paralysis of analysis. Find one or two strategies to begin with, get some experience and gain some profits, then grow from there.
With all the opportuninties available, I would recommend you consider taking over someone’s existing financing rather than putting up your own credit. Find a deal you can take title ‘subject to’ or on a lease purchase…save your credit!!
thank you for taking the time to comment aj and rob
which strategies would you suggest for a starter such as myself?
also could you elaborate on the subject to and lease purchase
im looking to do anything that is profitable in real estate, so im willing to try any and all of it
tty soon
It is great that you have such high ambitions and goals don’t give up on them. The only bit of experience I can give you right now is to just get your foot in the door and start making moves in the real estate world. It is through example and demonstration that build a client base and build the credibility needed to accomplish all of your goals. Although your goals are big they are completely attainable with determination and a little hard work.
Hello I went to the enlightened wealth institute seminar a few months ago and Im wondering how does one find a mentor/investor willing to teach people to make a lot of money. At the seminar they said dont rely on books to learn investing becuase its like learing to box just buy reading. Also should i join an investment club to get going? Anyhow in a nutshell. Im low income(living with parents)making 19,000 a year, and eager to learn how to invest for financial security and what is the first step?
The reason people at a seminar don’t want you to rely solely on books is because they’ll provide their “services” to you or tell you the secrets to REI for several hundred or thousands of dollars.
If you want to start investing, live below your means, start saving, read as much as you can here in the forums, find a local REIA meeting to attend, etc. Figure out what aspect of REI interests you and what you’d like to focus on. No reason to spend lots of money at a pep talk (seminar)…
thank you guys for the posts
i also live with my parents and make about 20,000 a year (2 jobs, one full, one part time). so i know where you are coming from cacoca
JRMcGee-ive been wanting to put my foot in the door for some time, so its nice for the encouragement
i also agree with justin- read up on as many things as you can, ive learned soo much from this site alone that i havent found in any of the books i have read. so i doubt an expensive seminar will be much more help. given the fact that this site is all written down and can be referred back to as many times as nessecary.
thanks guys
and happy investing
A 22 year old with a good head on his shoulders.
when I was your age, I wasn’t even close to having such goals!
Good job.
You can attain all of these, but they have to start somewhere.
You have to gain experience and gain some knowledge, but do it
steadily and systematically.
Start off by putting houses under contract and wholesaling them to other investors.
Here’s why: you get paid to learn.
You get to learn the biz from marketing to negotiation to contracts to estimation of repairs, to wheeling and dealing and only risking option consideration- which for me is about $10.
Yet the deal could be work Several $ks
When you get your cash reserves up as well as your experience, move on to holding properties yourself.
Wholesaling is an excellent primer for your lofty goals
BTW, you’re welcomg to thh Power point presentation on how to start and finish your REI career on my website.
While running student housing may seem appealing from a passive income standpoint, there is a LOT more to it than just collecting rent and counting your moolah.
Start small and for god sakes, do not do your first property with extensive rehab. That cost me $38,000 to learn that lesson so pay attention.
There is good money to be made as a landlord but make sure you are cut out for it.
Try flipping a few deals and get out of your folks house first. Being a tenant yourself is the first step toward being a landlord.
it was a free work shop actually, but there are seminars that cost lots of money, what they were offering was to train people in their workshops and have access to teleconfrences at a starting rate of $18,000. pretty sick. They mentioned that an investor does not have to be present for the rehab, and advocated using addendums for Assignment of Contracts. do you agree with any of this? How or where would I find a local REIA meeting? Also how many hours do you spend a week on making your investments? Thanks for the info I will definately take it into consideration.
You do not have to be present for all of the rehab, but that depends on how much you plan on having other people do and how much you trust them. Through experience, I’ve found a plumber/electrician/HVAC guy, a carpenter, and a roofer I can trust. I don’t need to be on site when they’re working as they’ve done several jobs for me and not screwed me on the prices.
I don’t do assignment of contracts so I have no comment for that.
You could try to look in your local newpaper and see if there is a REIA meeting advertised or you may see it on the sign of a local hotel. You could also ask some Realtors to see if there is an active REIA in your area (if there’s not one listed on this website for your area).
I’d say I average about 20 hours per week on our investing. Most of the rehab is done late at night or on weekends. I’m going to try and not do as much this summer so I can enjoy the summer, but we’ve been growing pretty fast so it’s been busy for awhile. I have a regular day job 40+ hrs a week, take online classes in my “spare” time, and fit the REI where I can.
Great answer… Regarding the pep talks… Too much crap handed out at some Boot camps and seminars… There is something to be said for just rolling up your sleeves and getting a little dirty… Learning this thing the ole fashion way…
I should start logging how many hours I spend buying houses… I bet it isnt two hours a day… Certainly in 05 it was 10 hours a day but that year I did a couple hundred deals… lately 2 seems to work just fine… And I have to say the heart doesnt race as much as it did either… Enjoying working as much or as little as I want…
Reminds me of the picture John Locke posted of him in a hammock snoring… (it was a cartoon character) said it all…
Lately I have noticed a lot of new investors on the board… A lot of people are reading a lot of books… I wonder when people realize they can stop reading and just start doing… Which page reads “put me down and begin”???
I once read that if you read seven books on a topic that you can consider yourself a pro… Must be a lot of professional investors not investing now a days…
Michael,
Thanks! I will admit I have not attended RE bootcamps, but have attended other seminars or sales pitches of a similar nature (Amway anyone??). Even if you get in the door for free, they’re still going to try and hook you for something by the time you leave. Their job is to motivate you, tell you that yes - you too can do this, and tell you to take the next step for $XXXX.
We learned this the old fashioned way by using common sense and having a little luck too. It definitely gets easier, but it was a lot of learning and work up front establishing everything.
I’ve noticed a lot of new people here lately too. That’s great! It’s really good to have some new blood, new questions, new experiences.
For the people watching the game from the sidelines, it’s a mental hurdle that you’re either going to overcome or you’ll stay where you are. It cracks me up to see shows like “My First Place” on HGTV where there’s SO much drama about these houses and the purchase.
It truly gets to where it’s not a big deal at all and we just realize we’re adding to our income and inventory when we pick up more houses. Your views will also change as you develop as an investor. I used to think I needed to over-rehab so we had the best units. Now we do what’s necessary to make it pretty decent on the inside and then it’s time to move on to the next one. I wanted to keep doing more, but my wife helped me realize that we were going to spend money on things that weren’t absolutely necessary which would take more time to complete. Therefore longer vacancy and less rent.
We don’t do as many deals as Michael because they’re different types of deals. I couldn’t imagine acquiring 200 houses a year for rentals…
Lol i must be a pro then if that seven book saying is true. But im taking your advice and gonna quit reading books as soon as i finish up with the last two i bought (i bought them before you recommended i stop) dont want my money to go to waste. But im not buying any more rei books. I deffinitly agree with michael that at some point you have to just do and if you fail, just fail forward.
ok just wanted to give an update and write back to the posts
plus over 400 views is amazing thanks everyone
Dennis: thank you, i find today that without goals in mind, life is somewhat tough as an understatement. since your suggestion, i have looked more into the wholsaling, its a little confusing, but maybe im not understanding some of it. i will continue to look into it. i did go to your website and put my email into the system.
JohnSchroeder: i do undterstand that there is much involved with being a landlord and am also informing myself on how to be one. i was a tenant while away at school and do know the downfalls of what potential renters can cause. im not terribly worried about renovations cost as i have some friends of the family, scouts, that can/know how, are in construction. plus my friend who will go in on the deal and i both know how to do many things related to handyman projects, much of it we learned in scouting (both eagle scouts), and jobs we have worked on together. so much of the renovations will be done at a greatly reduced price as well as done ourselves. thank you for the heads up though.
cacoca: as an investor/owner occupant, i will of course be present for most if not all of the renovations. i have been looking to goto a REI meeting and am willing to drive up to an hour away, but most are held during my hours at work. two jobs keeps me busy with 55-60 hours at 6 days a week. fridays i have off and do many errands and appointments that i cannot do during the week. i spend my nights after work doing research which i would consider as an investment.
Justin: i see we are on the same page trying to fit in as much as we can when we can. ive also done amway. and was the upline for many people at my college, but it only goes so far with broke college students. 300 a month is a lot for someone to spend before you have 5-6 people on your downline. thanks for taking the time to post.
Michael: i very much enjoy any and all of your posts. you have great insight into many things in this business and i trust your wisdom on much of what you write. 200?!? kudos to you. thank you
JJBlayde: im also going to read less and try to do much more ive learned so much and want to put it to action, so that i can move onto the next step.
ok so the house my friend and i are looking at is a 7bdrm/4bath, has 3 kitchens, a washer and dryer hookup
in november it was listed at 148,900, it has gone down to 84,900 as of yesterday. a 64,000 drop in price.
it is in foreclosure/REO (same thing i believe)
it does need a good amount of work. im pretty sure 20,000 will cover materials, labor, and 3-4 mortage payments
(as the help from family, friends, personal contacts, and the work im capable of doing)
the house estimate as per zillow.com is worth 287,000. but this i assume is an estimate from when it doesnt need to be renovated
with a 100,000 loan at 6% (600 monthly mortage) it is completely feasible for two people to live in this house and make the payments
the only thing that concerns me is that the annual taxes are just over 13,000
since the house needs work, shouldnt the taxes be much less, since the house in theory is worth much less in its current conditon?
thoughts, comments, or suggestions??
It’s a funny thing about tax assessments…
You’ll want to get it reassessed to lower the tax amount, but you’ll also be improving the place. One of our houses was 9.1k to purchase, but assessed at 38k. I couldn’t even try to get it reassessed until after Jan. 1 of this year, but we’ve also completely rehabbed it too. So I’d be stupid to think the assessor would come out and drop the assessed value a bunch after we’ve improved the property.
Hope you can get something worked out because that’s a huge amount for taxes.