21 years old with $2000, what should I do?

Question

Hey everyone.

I have no experience aside from the countless articles I have read online. I'm receiving money that my grandpa had left me in a CD, and I would like to reinvest it. I'm using some of it to eliminate my debt, anf will have about $2000 left to invest. I've looked at mobile homes, and found a couple under my capital, but with lot rent, theres not much profit. I thought about fast flipping and reinvesting until I got my desired capital. As seasoned investors, if you could be in my shoes what would you do to make the most of what you have? My goal is to eventually own a handful of multi-family properties and have them managed by someone else so that I have a very sturdy income and by the time I have children I can have all the time in the world for them.

Thank you

Engelo Rumora · Answer

@Chris Miedema

Hi Chris,

Well done.

Its great to see someone your age looking into real estate.

I can tell you that you are already ahead of the game.

I suggest saving a bit more and to keep asking questions of other investors who already are where you want to be. This is the best way to learn.

Read the odd book here and there and attend numerous personal development seminar but leave your credit card at home hahaha

Also, this forum is a great source also.

Make a passion an obsession and you will never work a day in your life.

Thanks for reading :)

James Wise · Answer

Welcome @Chris Miedema  is your other debt low interest?

How much money were you left with from this cd?

you may already have enough to get yourself into a rental property.

maybe an FHA owner occupied duplex or quad.

Edward Burns · Answer

Since you used most of the proceeds from CD to pay off loans, make sure you take the money you were paying on the loans and "pay it to yourself", not as additional discretionary income. In addition, start looking to see if there are special home owner programs in your area. Some programs allow you to place little or no money down when buying a home in a specific area. If I remember correctly, when I bought my first home, It cost ~$25K and I had to put down 3%, suddenly HUD (as it was foreclosure) announced they would give a rebate of $600 for any home closed within 30 days 0r $300 for closing within 45 days. Anyway, even after prepaying insurance, setting up escrow accounts, covering closing costs, I wound up coming out of the closing with a check for $200.00, a "new" house mortgage to the hilt, and payments less than I was paying in rent and 6-months taxes and insurance paid or in escrow. Never did figure how it all worked but did not complain.

So stay liquid, add to your savings, join a real estate investment club, and keep your eyes open for a bargain. They do exist in almost every market.

So stay liquid, add to your savings, join a real estate investment club, and keep your eyes open for a bargain.  They do exist in almost every market.

Ramon Jenkins · Answer

Maybe also look into Homepath and Homesteps

for low down payment owner occupied property

Maybe this thread will answer your question

truth about wholesaling

Chris Miedema · Answer

I've come accross wholesaling quite a bit on the net and BP, what is it?

Candace Hunt · Answer

@Chris Miedema

I'm a young person (25) getting into investing as well so I can relate. This site is a great place to start. I have some experience, as I'm a licensed real estate agent, but am still learning a lot. If you're interested in multi-family units then I would agree with James. Get an owner occupied loan on a duplex or multiplex, live in one unit and rent the others out. The rents will help pay for the loan and potentially give you cash flow.

There are a lot of steps to take before getting to the final step like:

Researching loans/mortgages and different programs for assistance, what it will take to qualify for a loan, getting the capital for a down payment, finding the right property, etc.

This is the route that I was planning to take, but I may do an owner occupied single family instead for different reasons.

Something else is to speak with wholesalers, possibly find a mentor, learn vital skills to complete wholesale deals and use that as a way to build up your cash flow.

Chris Miedema · Answer

Thank you all very much. All of this has helped a lot. Im learning a lot and hope to learn much more. I'm going to look into the networking come tomorrow.

Ashish J. · Answer

Chris,

I am almost in the exact same position as you are. I am 21, still in college, and have a hair over $1000 to my name. I am fortunate in that I have a job lined up that begins mid-2015.  Like you, I am extremely eager to get started in investing and have spent a lot of time reading the forums.

My views may be a bit more conservative than what some of the others suggest, but I believe you will find them helpful.

1) Get your personal finances in order - not having to worry about fines and other debts will be beneficial as you take on your real estate dreams

2) Network, network, network - remember that you don't know what you don't know. Meet with people whether it is here on BP or with your local real estate clubs. They will cast new light on the industry and expose you to new ideas and methods. To answer one of your questions the National Real Estate Investors Association has quite a few local chapters that could be a good place to start.

3) Continue to improve your knowledge. Do not stop learning. I have learned from reading quite a few posts that a lot of these successful members are humble, and perpetual students.

Best of luck!

Ashish

Marian Smith · Answer

A less common and less successful way to begin investing is to go to a seminar in California and buy sight unseen a new trac home in an outlying suburb of Austin, Tx, get a loan as an owner occupant, hire a property manager to rent it out but with negative cashflow because while houses are cheaper in Texas, so is rent but , property taxes are much, much higher, have a tenant flood the house when her old, vinyl supply lines to the washer bust, and not have enough savings for the insurance deductible and the mortgage  while the house is vacant, end up in foreclosure. true story. (not me).

Marian Smith · Answer

The most common and  most successful way to  begin investing in real estate is to buy and live in a single family home until  that time you can move to another  property and rent out the first one.  This would mean buying a property that would make a good rental for you in your  circumstances--so probably something small and cheap so you can afford the vacancies or repairs that come up.  Buying something off the HUD home store that is offered only to owner occupants is a good way to get a good deal on that fiest property.

21 years old with $2000, what should I do?

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