Recent College Grad Looking into REI

[Christian Solano]

Hello everyone! I am happy to have recently joined this community after much consideration.

I am eager to start this journey and like many of you, I assume, I have no idea where to begin. To give you guys some context on my situation, I recently graduated college and have a net worth of -$47k: -62k in student loans** +17k in savings, I got a 'W-2' job in a reputable company earning around $50k base with around $6k in bonuses, and I'm living with my parents in the Houston, Texas area (woohoo free rent and food) so I am able to save around 1-2k a month. 

REI is something I want to take on because I know that I'll never reach financial freedom moving up the ranks, or it'll simply take a lifetime to do so. In addition, the challenge and creativity that comes with REI are intriguing to me. I am ready to take the plunge and I am doing the research: listening to BP podcasts, reading some REI books, and taking notes.

My hopes are that I can get some advice on what strategy I should pursue; does a BRRR strategy make sense? perhaps an Airbnb rental? maybe rent an apartment while I save to buy a rental property? I would love to hear some advice on what strategies could help a noobie like myself, as well as what books I can buy to gain more knowledge for this journey.

Any and all advice is appreciated. Thank you ahead of time!

**It's important to note that my student loans are on forbearance until October of 2022 and the monthly payments will be around $125/month so I am in no rush to pay the loans. I'd like to take the additional income from REI to pay off the loans quicker, but seeing that the monthly payment is very low, I'd rather invest in real estate first rather than pay chunks of my loans right away (unless there's a better argument to do so)

[Nathan Gesner]

Quote from @Christian Solano:

Hello everyone! I am happy to have recently joined this community after much consideration.

I am eager to start this journey and like many of you, I assume, I have no idea where to begin. To give you guys some context on my situation, I recently graduated college and have a net worth of -$47k: -62k in student loans** +17k in savings, I got a 'W-2' job in a reputable company earning around $50k base with around $6k in bonuses, and I'm living with my parents in the Houston, Texas area (woohoo free rent and food) so I am able to save around 1-2k a month. 

REI is something I want to take on because I know that I'll never reach financial freedom moving up the ranks, or it'll simply take a lifetime to do so. In addition, the challenge and creativity that comes with REI are intriguing to me. I am ready to take the plunge and I am doing the research: listening to BP podcasts, reading some REI books, and taking notes.

My hopes are that I can get some advice on what strategy I should pursue; does a BRRR strategy make sense? perhaps an Airbnb rental? maybe rent an apartment while I save to buy a rental property? I would love to hear some advice on what strategies could help a noobie like myself, as well as what books I can buy to gain more knowledge for this journey.

Any and all advice is appreciated. Thank you ahead of time!

**It's important to note that my student loans are on forbearance until October of 2022 and the monthly payments will be around $125/month so I am in no rush to pay the loans. I'd like to take the additional income from REI to pay off the loans quicker, but seeing that the monthly payment is very low, I'd rather invest in real estate first rather than pay chunks of my loans right away (unless there's a better argument to do so)

I recommend you build a strong foundational understanding of real estate investing.

1. Start with BiggerPockets Ultimate Beginners Guide (free). It will familiarize you with the basic terminology and benefits. Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turneror The Unofficial Guide to Real Estate Investing by Spencer Strauss.

2. Get your finances in order. Get rid of debt, build a budget, and save. The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money. A wise investor will not try to get rich quick with shortcuts. If you can't keep control of your personal finances, you are highly unlikely to succeed in real estate investing. Check out my personal favorite, Set For Life by Scott Trench , or The Total Money Makeover by Dave Ramsey.

3. As you read these books, watch the biggerpockets podcasts. This will help clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.

4. Now you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books for this or you can learn by watching podcasts, reading blogs, and interacting on the forum. There is a handy search bar in the upper right that makes it easy to find previous discussions, blogs, podcasts, and other resources. Biggerpockets also has a calculator you can use to analyze deals and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, it will be much easier to recognize a good deal when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.

5. Study the market. You can learn to do this on your own or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR that works with investors and knows how to best help you.

6. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. The truth is, you could read 100 books and still not know enough because certain things need to be learned through trial-and-error. You don't need to know everything to get started; you just need a foundation to build on and the rest will come through experience and then refining your education.

You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g. "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is a pretty forgiving world and the average person can still make money even with some pretty big mistakes.