Im 18 and just starting out

[Drew Herzog]

I have many questions about this topic. If you can answer any of them that would be great! (I'm looking into following the million in net worth plan from the book)

When buying a property for a low value ex: a duplex in Cisco TX for 95k and probably cheaper. Does that have increased risk?

I have about 25000 saved up and I'm living at home for free how much of that should I spend on a property or save.

How does someone truly manage a property "effectively" from a distance?

How do I find new expanding and promising areas?

Are trailer park homes good investments?

With the election coming up is that a good time to buy?

I have many more questions but that is it for now thank you for your time

[Ryan Blake]

Hi Drew!

I hope you are able to get to $1m net worth much quicker than I did. It took me until I was 37. I tried to answer some of the questions that I have some experience with:

When buying a property for a low value ex: a duplex in Cisco TX for 95k and probably cheaper. Does that have increased risk?

I don't think the value comes into play with the risk. It is more about the location. Cisco is a small town over an hour away from a city with 100,000+ population. Not saying it won't be a good deal but you have to know that vacancies can last longer the lower the population. It will ultimately be based on the supply and demand of the area but you have to keep an eye on the total renter pool as well. You also want to keep in mind a exit strategy. It could take longer to sell when you are ready to move on to a bigger / better project.

I have about 25000 saved up and I'm living at home for free how much of that should I spend on a property or save.

You will always want to spend a little as possible. But you also want to make sure you have enough left over to make sure you have some holding costs should things not go as planned. You don't want to get yourself into a bind on your first property. I would say you want to keep your cash to close to $15k or less so you have a little bit of runway if it takes some time to get it rented.

How does someone truly manage a property "effectively" from a distance?

I would highly suggest you do not start remote for your first deal. Specifically as remote as Cisco. It is a 2 hour drive from the nearest commercial airport. I think there is a valid time to invest remotely but I will be honest, I have never done this so take my advice on this for what it is worth. I would say you will want a local property management company if you plan to be remote.

How do I find new expanding and promising areas?

Follow the money. Where are locations that are getting big investments. Where are areas that have a diversified economy? Where are areas that are growing? Those are good questions to research when looking for good investing areas.

Hope my answers help at least a little.