Hey a little about me. I am 21 and very interested in making real estate investment a business and career choice. I am very green, completely financially illiterate. I’m getting married this year and me and my fiance are going to make some financial goals for our family. We have no money, poor credit, (my fico score is actually 519) and we both get lost when it comes to calculating ROI or understanding financial terms.
So far I’ve just been doing a lot of reading about real estate, finances,investing and classes I should take to help me understand the financial aspect. He’s been doing a lot of research on budgeting and saving. As far as our short term goals are concerned would it be better to focus on credit repair, formal education to get a better financial understanding or saving up for a sizeable down payment for our first attempt at investing in real estate?
I know we can’t do all three at once so I wanted to prioritize and I wondered which choice would help us be more successful in the future. I know that eventually I want to focus on duplexes and triplexes and that I want to buy and hold to create cash flow. I also know that I eventually want to hold property in states that our family occupies. I just don’t know which short term goal to commit to. Any feedback would be appreciated.
Your good credit is your most valuable asset as an investor if you want to go beyond the point of picking up the crumbs off the table. No money deals are very rare, and they often hinge on your credit rating.
Down payment money is very useful, but not as useful as a good credit rating.
Formal education? Well, a college degree isn’t necesssary, but you MUST understand basic finances in order to suceed. But at a local junior college, you can cherry pick and just take a few courses that might be valuable. Many of the private real estate investment courses are expensive and won’t teach you anything that you can’t learn for free right here on this forum.
There are schalarships and grant money to pay for college classes. I suggest a good solid undestanding of basic math, then some basic accounting, a semester or two of economics, and at least one advertising course.
Some junior colleges offer courses in small business management. The courses offered by the SBA are good nuts and bolts courses, if you can find them.
I suspect that many of the people on this forum grew up in households where the basics were a part of life. They grew up with budgets and balanced checkbooks, so they don’t understand how much information is involved in basic money management and investing. They may tell you that you don’t need any college classes. But if you don’t already know that information, you must take classes to aquire it. It’s not like you can sit at a lunch counter and have a strange explain it to you in 5 minutes.
Hi! Welcome to the forum!
What is your fiancee’s rate going to be? I am prior enlisted, went thru Great Lakes, and am now commissioned and flying for the Navy. My wife and I have property in my home state. If that’s what you want to do, it would be really helpful to get basic support from your family. For our property, we take care of everything financially, screen applicants, etc. My parents help out by showing units when they’re vacant, go let people in for repairs, etc. It’s nice they’re willing and able to do that. We manage the property ourselves.
No matter what you choose to do, you need to get that credit score up…period. It is a measure of your financial trustworthiness. You can check www.militaryonesource.com They used to have a way to get a free credit score and it also gave a basic analysis of why your score is where it is and also helpful tips on how to raise it. You can also get a free credit report from each of the three major credit reporting agencies (Equifax, Transunion, and Experian) once per year.
IMO, one of the most important factors in setting goals is setting REALISTIC goals. If you have $50k of debt and $20k/yr of income, it is pretty unrealistic to set a goal of being debt free in 12 months. Setting goals you can never attain will only serve to disappoint you.
You can learn tons by reading the forums here. Pick which ones interest you and read EVERY SINGLE POST in those forums. Start with the oldest threads and work up to the current ones. Take notes along the way.
A great resource you will have for learning financial basics is your local Fleet and Family Service Center. They’ll have basic finance classes, car buying classes, home buying classes, etc…all free to you. Take advantage of it if you need help.
One of the most important things you and your fiancee can do is talk about and be in agreement about money. If you both have a common goal and good communication, it will be easier to get from point A to point B. Make sure your fiancee studies his rate for his rating exams, gets his warfare pin, etc so he can advance. Every little bit helps. Living in Base Housing is a good thing financially. You’ll likely get a better unit by giving up your BAH and living in housing with no utility bills than you would by living out in town. There are some downsides to housing too, but financially it’s a good thing.
There are some nuances to REI while in the military that most people don’t have to deal with. It makes it more challenging, but it’s possible.
You should strive to live below your means and save what you can. You and your fiancees friends will go out an buy the best car they can for their pay. Don’t fall into that trap. Be reasonble and see the end goal…the ability to buy and hold multiple properties.
Before you shoot for the moon, start with some more basic stuff. Your first goal should be to get your personal finances under control. After that, your credit score will improve on its own.
Why is your credit score 519 at 21 years of age? Do you have maxxed out credit cards, maybe a few late payments, school loans? If this is the case, then you have to look at the behavior that got you here. Learn how to live below your means so you are not financing your lifestyle with credit cards.
Go to the public library and check out the book, The Millionaire Next Door. Read the book and see how ordinary people become millionaires by living below their means. Find ways that you can change your spending behavior to live below your means. The trick to becoming wealthy is to save and invest. Contrary to what many of your peers may think, wealth is not measured by how much you make, but by how much you save.
Next, you say you are financially illiterate. Start watching Suze Orman on CNBC every Sat night. Suze can get a little preachy, but her programs will give you valuable lessons about responsible personal financial management and teach you some of the financial jargon you will need to know.
You are getting married. How will you live, where will you live, and how much will it cost you to have that lifestyle? If you don’t know how to make out a budget, you need to learn. Making a budget is just itemizing all your living expenses each month and making sure that your expenses are less than your income. If your expenses are greater than your income, then you can figure out where to cut back.
Once you have achieved this first goal, come back and we will help you learn how to invest prudently.
First: you want to sort out your personal financial issue.
Second: start by learning the basic concepts of real estate and business. For instance, cash flow, accounting knowledge, etc.
If you want to get into real estate business, you need to get yourself familiar with relevant laws and regulation. Many people ignore this part, but laws and regulation is one of the most important aspects of real estate business.
Hi after completing your academic preparation you join to some realtor agency. Find a mentor. Learn from the master. Without personal experiences you can not a day. Start by bird dogging.