Liquid 15k to invest. Better to save it while I'm learning?

Question

I'm pretty fresh to investing, I'm in the middle of my first deal right now and it was a pretty odd one at that ( a rehab on a purchase option with a plan to use the rental income from the property to pay for the property itself.

The deal is finishing up right now and although I'll probably end up making very little money with it I have learned A TON and I am ready to start investing more seriously.

I'm pretty strapped for startup capital due to having extremelyy low job income but I do have about 21k in mutual funds right now that I could liquidate whenever I want and probabably have about 17 after taxes.

One part of me wants to liquidate it immediately and leverage it into a decent first property ( or two) but one part of me thinks that I should save this easy money until I have more experience and I'm less likely to squander it.

If i do save it, it could mean waiting years until I have a career which can provide that sort of discretionary income to start with  ( I just graduated college and don't have any serious long term job offers yet).

So, I want to hear some opinions on how wise you guys think it would be for a young person to throw in everything theyve got with relatively little experience

Account Closed · Answer

Sounds like you are at a crossroads.  You may want to sit back and decide what it is you really want to do with your life.  Sounds like you have completed college and probably don't yet have a job related to the education area you concentrated in.

RE investing is an awesome way to build wealth, but it can bankrupt you.  If you are buying property to hold, you need sufficient reserves for the rainy days because they will come.  Great to hear that you are getting started, but I would urge some caution.

A few things you might want to consider:
Have you decided that you are going to work for someone full time?

Have you considered volunteering in your field of interest so that you can build experience (sounds like you are unable to currently find work in your field)?

Are you exciting about RE or is it a way to make some money?

I have no idea what kind of experience you have, perhaps you have the skills and some business sense you can even create your own work (your own business).

It just seems that you need to a look at where you want to be in the next several years, what is important to you, what excites you and then do everything in your power to make it happen.  There are creative ways to get started in a career if that is what you want.  Just do it.

David Sheeran · Answer

I was in an identical situation this past summer. I had just graduated college and I was working a job that provided little income. I wanted to rehab and hold, I had 15-20k saved up, but I was still really green to investing and didn't want to risk bc of the little income factor. And like Bryan said, what happens when you have vacancies and tenants dont pay? So I opted not to. Instead, because I knew that I wanted to become a full time investor in the future, I chose to get my real estate license and become a sales agent. Being an agent and investor go hand in hand, not to mention pocketing the commission on transactions! Something to think about...

Mark Updegraff · Answer

So you want to buy & hold?

Start looking for property and set a realistic ROI (say 20% cash on cash) Get out there and start making offers! But be cautious & patient, & always do your DUE DILIGANCE  If you can't get a contract with that ROI, find a better location.

This is a great place to help you on your way.

Just like the lotto "you gotta play to win"
Good luck & welcome!

Account Closed · Answer

good getting out there and making your first deal happen!  you'll more from than that than any book probably..be careful not to overleverage all your money with a loan, and then have no reserves...what would you do then, if a tenant doesn't pay the rent, or you have to evict and they destroy the place? :roll:

Adrian Williams · Answer

I agree with James try and find a partner  that way you share the cost and risk with someone esle, what part off the country are you in ?

Scott M. · Answer

An Ma,

Send me an email with your contact info and I will see if I can help you out.

Loc R. · Answer

Two words:  Lonnie deals.

Best of luck.

Andrew M. · Answer

To  David Sheeran: I'm  considering doing the same thing as you now and I would love to ask you some questions. Is there anyway I could contact you privately (email or phone?)

In general I'm still applying for jobs right now. REI is really the only thing I'm passionate about in terms of a career but until I have gotten to the point where my REI activities can sustain themselves, I'm going to run under the assumption that I cannot rely on that in terms of long term income and try to pursue a "corporate" career. The second things are going well in investing for me though I would put everything else to the side and pursue RE full time.

One thing I'm also torn on is whether to accept lower paying jobs that might give me some experience or more official jobs which would look better on a resume and could lead to a high salary position down the road. I have an offer to work as a leasing consultant for a local property manager but at this point I'm thinking I'm going to turn it down and look for something in the finance sector because first, the pay is terrible, but more importantly because its not putting me on any career path where I could be making any money down the road.

I'm just nervous that I'm going to throw away my current oppurtunities trying to invest in RE and then find out it was a pipe dream...

James Vermillion · Answer

I got started by partnering with a friend who was knowledgable and one I knew I would have a great working relationship. By partnering we were able to buy multiple properties where I would have only been able to work one.

Andrew M. · Answer

Yeah I should have been more specific. I'm looking to mainly buy and hold or rehab and hold.

Liquid 15k to invest. Better to save it while I'm learning?

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