How to begin with low capital, high debt, and an bubbling market?

[Matt Hintzke]

Hi all,

My name is Matt, I am 25, and looking to begin my journey to financial freedom. If there is something I see the most regarding building wealth for retirement, it is to start early. So that is exactly what I am trying to do. I graduated school in 2014 with a B.S. in Computer Science and immediately started working at a startup in Seattle, Wa. I have been working there since and I love it, however, just like most jobs there still seems to be a financial wall that I will hit in the next few years limiting my total earnings. Now don't get me wrong, Comp. Sci. and software engineering is a great career that is on the rise and salaries are still very fair, however, Seattle is becoming the next San Fran area with the rate the tech industry is growing and this has caused real estate and the rest of our economy to rise.

I have read many of the blog posts and guides on this site about beginning your real estate career, however, whenever I attempt to take the knowledge to a real-life scenario I can never understand how one can start out in real-estate without capitol. Many examples I have read talk about purchasing your first multi-family home at around 200-400K and putting down just 25-30K. However, in Seattle, Wa, I cannot find a single duplex or multi-family home for less than 600K and a 100K down deposit. The market is just much too high to find anything in a price range that I can even come close to.

As a recent grad, I have 60K+ in student loans, a 20K car loan, and am currently renting @ about $2,100/month (split with girlfriend makes my share $1,050). On top of that, I put away 7% into a 401K, and 5% into a general savings account. As nice as my salary seems (in the 80-85K area), with all these other debts, I find it difficult to plan for a future in real estate.

I feel as if I am caught between a rock and hard place because I feel like it could take years before I save enough cash to make a down deposit on such an investment, and in that time I assume marriage, kids, personal residency will all take a toll on my finances just further burying myself and impeding my ability to enter the market. By the time I end up saving enough it will be too late and I will have wasted many valuable years that could have gone towards compounding my money.

So basically here are my questions:

1) Does anyone have any tips on starting out in a bull market with high debt and low capital?

2) In this market, does it make sense to begin my investing with real-estate or should I begin somewhere else?

3) I have taken in a lot of information about investment and real-estate in general and I am not sure where I should be... i.e. I don't have enough to enter the market, so do I just save and save until I do or do I put that money into 401k, IRAs, MFs? The last thing I want to do is let thousands of dollars just sit in a stagnant savings account that won't do anything for me, but I am hesitant to just dump my money into the market or a retirement account.

Any and all guidance is very much appreciated! I am not looking for a mentor, but rather some tips or real-life experience on the matter and how some others might go about entering real-estate in this scenario?

Thank you,

Matt