How Do I Get Started Right Out of College OR In College?

Question

Hello all!

I am currently a sophomore in college going for a double major in accounting and finance. I recently discovered the "real estate realm" and I am incredibly interested and fascinated. My question is there any way that a college student can start investing? And if not, how do I get started as soon as I have graduated? Also, I've heard about loans where you only have to put a 3.5% dp. It seems too good to be true, but could someone indulge me on that as well? I know very little about all the possibilities out there so feel free to list off some tips and tricks. I already have a feeling that most of the comments are going to swim around the lines of, "Focus on school first" or "Learn as much as you can while you're young." I just want to say for the record that I am putting school as a priority for now and that I am trying to learn as much as possible on this subject. I just want to know if there are ways to get started ASAP.

Thanks in advance!

Matt K. · Answer

Depending on your income it can, look up house hacking.  Seems like you're getting some good experience... and you're on a solid path, be patient.

Matt K. · Answer

Look at ways to reduce your living expenses... doesn't sound cool as investing but you're investing in yourself with college. Learn how debt works, learn how the math works, then you can see if you can outperform the debt or you should pay it off. Even without buying right away you can reduce your living expenses by getting room mates for example.

You can do a FHA loan w/ 3.5% down... do you have a job?

I'd find out who you are as a person and what speaks to you... find out what you're good at and more importantly what you struggle with. Once you find what you're good at, become REALLY good at it and use it.

Matt K. · Answer

Everyone always so against renting, yet crunch the numbers it can make sense. I can show you houses here locally (and I'm sure in most metros) that are cheaper to rent then they are to buy (without a considerable down-payment).  Then add in the fact that you can get room mates to further reduce your expense it can more or less achieve very similar results as buying a house to house hack. If you're smart you could even leverage a cheap lease against a STR demand and live free.... Check out rental arbitrage (link is just interesting example)

http://blog.airdna.co/most-profitable-airbnb-citie...

Abbott Mary · Answer

Completely agree with this. Living outside your means can make high income earners broke while living within your means can make low income earners wealthy. $500/mo cash flow is great but becomes pretty meaningless if the person makes irresponsible financial decisions. Personal finance is the first building block to financial independence in my humble opinion. As for house hacking I think it's the best first home purchase a young person can make.

Bryan Witters · Answer

@Braden Taylor No worries. You will need time to save up enough cash anyways. Even with the FHA loan it could take a considerable amount of cash to make a down payment, and have an appropriate cash reserve, especially in some markets... I am inChicago and multifamily properties are quite expensive. check out some properties in the area you would like to invest in and figure out how much cash you are going to need to bring to the table. Then figure out how much money you need to save each week, month, year, to purchase a house on a certain date. MAKE SURE YOU DECIDE ON AN END DATE FOR THIS GOAL. It will put a little pressure on you to save and help you to accomplish your cash goal.

To answer your question, it depends on your strategy. With house hacking I have read three months worth of mortgage payments at a minimum. Get out that trusty financial calculator and calculate the payment.  The more cash you have the better for the first time.

Braden Taylor · Answer

@Bryan Witters Sage advice! I may have to look into house hacking for next year (I'd do it this year but I am on campus housing). Would you happen to have a recommended $$$ figure that you might need for reserves to take care of the unexpected events?

Braden Taylor · Answer

@Matt Katsaris Will do! I appreciate it.

Braden Taylor · Answer

@Matt Katsaris I appreciate the advice! Very simple, but very true. I'm trying to keep my debt as low as I can. I don't even have a credit card yet, but I probably should to start building credit. When it is all said and done, I'm hoping to have a little less than $10,000 in student loans, and then getting those paid off ASAP. I have a few jobs: I do some bookeeping, budgeting, and business consulting for a local architect, I work at at CPA firm during tax season, and I own a little side business with my friend doing pressure washing and sealing driveways, patios, sidewalks, etc. Very fortunate to have what I have. But that FHA loan, I just heard about it. Don't know/think it would apply to me. Was just curious.

How Do I Get Started Right Out of College OR In College?

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