Advice for a young investor
Okay, I need some advice from you veterans out there. Here's my lifestyle and financial breakdown: I'm 22 and have just survived my first year teaching high schoolers all about the Krebs Cycle and mitosis. Within the past 10 months, I've been able to accrue a little over $12,000 cash. This is all the money I have, so all you rich silverbacks out there can look at my bank statement and play the "I remember when I was that poor" game for a good laugh. I still owe some money for college (We Are Penn State!...and we are broke!), but I have no other debts. Credit score is as great as it can be for my age. I was saving up my money for a house, but have come to a fork in the road as to whether I should invest this money better.
Here are my questions: Do I have enough money to actually do something here, or should I keep saving? I'm still relatively young and poor, so I don't want to rush into anything too extreme for my first go around.
Should I buy and flip a house or buy a multifamily home and lease the other part? Perhaps something else?
What are going to be some pitfalls that I won't even think about when I get into residential real estate investments for the first time?
Thanks so much for any advice!
Paige
Most Popular Reply
Hi, Paige! Welcome to BP.
It sounds like you are in an ideal situation to consider buying a multifamily building and renting out the other unit(s). You can purchase anything 4 units or less as an owner-occupant, the same as if you were buying a single family home for yourself.
If you bought a quad then rented out the other 3 units you'd recoup the initial investment pretty quickly, then be ready to expand your portfolio (all while letting your renters pay your mortgage!)
There is a wealth of help and info on this site to help you decide if you are cut out to be a landlord and handle everything yourself, or if using a property management company would be a better option for you.
I certainly wish I had this knowledge when I was young and without many responsibilities! Good luck and keep us updated!