Investing immediately out of college... advice?

Question

Hey there!

I am currently a college student in Washington state, and am extremely interested in investing in real estate right after graduation. As of right now, I believe that a small multifamily home will be a great stepping stone into my investing career and hopefully allow me to eliminate my rent expense. From there, I would plan on saving the money I would be wasting on rent, and allow it to build up for any operating expenses, and eventually another property to reside in as a permanent residence.

As of right now, I am a junior and have about a year and a half before graduating. Yet, I know I can start preparing for this venture now.

My Question to you is what would you suggest to a young ambitious college student eager to invest out of college?

For now, my plans are to: Continue adding into my savings account to accumulate enough for a down payment, acquire a credit card to establish a line of credit (card suggestions?), and further educating myself in multifamily homes & responsibilities.

I would appreciate any suggestions of other things I can do towards putting myself in a great position for investing in real estate immediately after college!

Thank you for your time,

-Andrew

Axel Ragnarsson · Answer

I'm currently 21 years old, a junior in college, and working part time as a real estate agent... and am under contract for a my first investment property, a triplex. The biggest hurdle you will face is obviously getting financing. I talked to over 15 banks and credit unions in my area and eventually used a combination of a conventional mortgage mixed with private money to acquire my first property. If you find a good deal, the money will follow. The only reason I ended up getting financed by my money partner and the bank was because i found a very good deal. I definitely agree with @Jacob Sampson that house hacking is by far the best option you have right now. In my opinion, you should house hack a four unit rather than a duplex/triplex. If you can find one for a good price, you will have a much better chance of living completely free or even cash flowing.

Josh Mitchell · Answer

@Andrew Waltner Honestly, while a 2, 3, or 4 unit sounds very good, with no experience it would probably be a lot to handle. If I were you, I would try to get a SFH, maybe 3 bed/2 bath and house hack it (rent out rooms). This option will allow you to not only get help paying the mortgage each month, but will allow you to keep an eye on things. Once you build up enough equity, establish job history, build credit to a higher number, save more money, look to rent the entire house, or sell it towards that bigger property. I don't disagree with anything said before me, but I think for a newbie, with no experience, you might feel overwhelmed with a property that has 2-4 units. IMO. Best of luck!!

Account Closed · Answer

After you graduate and secure a position related to your field of study, rent or scout the areas to determine the local asset classes.  After a few pay stubs, seek a pre-approval letter from a mortgage broker and/or your local credit union if you are a member.

Once you know where you are living and how much you can afford, you can then make some offers that won't over extend you financially and house hack a multi-family.  While you get a handle with the management side, save for the next one and move.

The Citi Double-Cash back card is the best.  2% back on anything you spend.  No games.

Account Closed · Answer

@Andrew WaltnerIf I were in your shoes I would househack a 4plex with an FHA loan. Not a duplex or a triplex but a fourplex. Rinse and repeat. That way you can use your 4 conventional loans (after 4 it gets more complicated) and have 16 units. Fourplexes maximize the number of units you get per loan and you can lock in a 30 year rate.

After we bought our primary single family residence, we bought two side by side duplexes. Great I thought. Then I realized we only had one more conventional loan that was easy to attain. After that we have bought nothing but fourplexes. At the end of the month we hope to be closing on what will be our sixth fourplex (plus the two duplexes). Good Luck!

Ian Walsh · Answer

I started right out of college and would not have changed a thing.  I would strongly suggest having a plan and learning your market very very very well.

Alexander G. · Answer

I'm also interested in hearing the answer to this! In the same position as you Axel..

Alexander G. · Answer

I'm also interested in hearing the answer to this! In the same position as you Axel..

Axel Ragnarsson · Answer

In New Hampshire the class is inexpensive and relatively short so I just took it while going to school for the education. After I got my license, I just went to a few brokerages and found out which one would work with the most, given my schedule. I work at Keller Williams now, and signed on to a team within the brokerage that has helped me a lot with my education and through leads. In my opinion, the experience far outweighs the compensation I'm receiving. You will find that many brokerages will be happy to help and work with you. @Andrew Waltner

Andrew Waltner · Answer

@Axel Ragnarsson Thanks for the advice, I will be sure to keep an eye out for a four unit when the time comes! I have a question for you, how did you become a part time real estate agent while in college? Did you get an internship with a company? Are you independent or with a company? I am interested in finding an internship related to the real estate industry to gain some actual field experience.

Jacob Sampson · Answer

OH and house hacking for a single guy as a way to get started is AWSOME!!  IMO.

Investing immediately out of college... advice?

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