How to get started RE investing as a 26 year old in Phoenix AZ

Question

Hi everyone my name is Pablo I just moved to the Phoenix AZ area from San Jose CA 2 months ago and I just joined BP to learn more about RE Investing. A little bit of my backstory: I am a former college football player and had graduated from university. In my first 3 years out of college I attempted to make an NFL team and had played some arena football to get into an NFL camp. My pursuit of a professional sports career fell short (injuries) and I never made any money in that pursuit but I did gain some valuable experience in terms of work ethic and perseverance. My grandfather was a successful full-time RE investor in San Jose CA but I had never took the time to learn about RE while I was growing up. My grandfather now has dementia so I can't really learn from him anymore but I remember seeing his financial success and freedom and I want to achieve it for myself. Being out of college 3 years I have first hand experience with the dismal job market for someone my age and am currently working as a personal trainer at a commercial gym. My current job barely pays the bills and I know that RE investing can be the vehicle that can help me build wealth and attain financial freedom. My question is how does a broke 26 year old get started in RE investing? I would appreciate all general answers along with answers specific to investing in the Phoenix AZ area. Thanks

Casey Miles · Answer

Hi Pablo and welcome to BP. I used the house hacking method on my first couple properties. Knowing what I know now I would have used that method on MF properties. Typically you can use 75% of the income from the occupied units (assuming there are signed leases in place) towards your DTI for qualifying. Get rid of any car payments, don't be afraid to drive a hoopty around for a while.

I'm not indicating this of you but I see a lot of young people look for immediate gratification, new cars, motorcycles, spending $ at bars/clubs. This can really slowdown progress. This was me until about 7 years ago. Granted I made good $ but I spent good $ too. I was forced to reduce my expenses do to a looming layoff. Got rid of essentially every monthly obligation I had with the exception of a cellphone.

Fast forward the 7 years and I've managed to buy roughly 1.5 properties per year (19 units). There are people who do it faster but this manageable for me, my goal was 1 property per year. I bought most of these when the market was down in Phx. I'm now looking into fix/flips.

Be patient yet aggressively get ready with your personal finances.

Best of luck,

Casey

Denny Robert · Answer

Pablo what gym are you training at? What brought you to Phoenix?

First thing I would get at is getting the right mindset. There are tons of great books on this, but I'm loving Miracle Morning. Brandon and Josh just interviewed the author on the BP Podcast, and I listened to the audiobook a couple months ago. Definitely read it. "Whether you think you can or think you can't, you're right."

Denny Robert · Answer

@Pablo Garcia, my office is right down the street from EOS, at Warner and River. Love this small world stuff.

Franklin Romine · Answer

Lots of people are in real estate.  Decide today if you want to facilitate transactions (sales) or personally own real estate.  I was able to starting buying property because I had a good w2 which I leveraged to accumulate good debt and eventually left a day job.

You might want to find a new source of income that at the same time exposes you to new people and ideas...

Franklin

Paul Timmins · Answer

@Pablo Garcia

Welcome. Fill in the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 100 past ones to catch up on.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com

Two Great reads, I bought both J. Scott The Book on Flipping Houses,  The Book on Estimating ReHab Costs  http://www.biggerpockets.com/flippingbook

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul

Pablo Garcia · Answer

@Ryan Moore I'll make sure to read up and follow the podcasts. Yes getting my finances in order is something that I will work on. I definitely need to cut my spending down. I live pretty modestly but I know there are some unnecessary expenses I can cut out and then use that money towards debt elimination and future investments. I don't have any student loans so I'm ahead of the curve for that

Pablo Garcia · Answer

@Denny Robert I work at the Eos Fitness in Tempe of Warner Rd. I came to Phoenix because my parents are actually planning on moving here in the fall and last year I was planning on either moving to TX or FL in order to live in a cheaper state with less taxes and living costs. When they were looking at houses in Phoenix in October I came down with them and liked the area and decided to move here after the holidays. I'll make sure to check that book out.

Bhekizwe M. · Answer

Welcome to Biggerpockets @Pablo Garcia.you find useful resources(podcasts, contacts,articles etc) for your REI journey

Make the time to learn from the best.they are active in the rei field and share their expreriences

Ryan Moore · Answer

Welcome @Pablo Garcia As far as REI, I would just say read up on the site, follow the podcast, the blogs, and webinars.  Personally, get your finances in order.  Develop a REAL budget.  Before I started investing in RE, I figured out how to decrease my monthly spending, got rid of a ton of a debt, and then saved that extra new found money and put it towards my new property.

How to get started RE investing as a 26 year old in Phoenix AZ

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