How to start investing when you want to move

Question

Hey BP community, I need some advice,

To begin, I'm 22 years old. I discovered my passion for real estate several months ago, and dove right in and started studying, reading books and listening to at least 50 podcasts so far. I plan on succeeding in this industry, willing to go through the ups and downs.

I'm currently in a non-ideal living condition right now, living in Woodbridge, Virginia in my mom's basement. I have a good amount of money saved up, and I want to start a new life in a new state, either North Carolina or Texas. I desperately want to move, just have to make the right opportunity happen. I feel like I know enough to start making some investing moves happen though. My first plan is to get a duplex or triplex and rent the remaining units out, then build off that with more rental properties, and probably dive into a little wholesaling later down the road.

I've heard those were good states to start investing in as well, I just want to know, should I put a lot of effort into networking and trying to look at properties in the Woodbridge/DC area, knowing I'm most likely leaving within a year? Or should I just focus on continuous studying until I make that move into the new area? What would you do if you were in my shoes?

Thank You!

Ron Gallagher · Answer

If your mom currently rents in Woodbridge you could by a property somewhere in Northern VA and then rent it out to your mom. That's what one of my younger friends did-- he was living with his mom in a townhome in VA that they rented. He was living rent free because it was his mom who was paying the rent and she didn't charge him. His mom didn't have great credit and may not have had any credit at all since I guess she got into debt with credit cards and then after she got out of debt she cut up all her credit cards and closed her accounts. So without great credit his mom couldn't buy a house, so he bought a townhouse in his name and then invited him mom to be a roommate and pay the same amount she was paying at the rental townhouse and they got one more roommate and now he's still living for free, with his mom as his tenant. His mom and the other roommate pay enough to allow him to live for free. He was living rent free before as a freeloader in his mom's rental townhouse but now he's building equity, experiencing what is like to deal with home ownership and repairs, and still living for free!

Account Closed · Answer

Both great pieces of advice here. If you know you're going to be moving within a year, you still need to continue to network in your local market, you don't know who you'll meet and who they'll connect you with. I like @Ron Gallagher's idea of househacking. Great way to gain experience since you're managing the property onsite. Good luck!

Randy E. · Answer

Unless you have $100,000 in savings, I would continue to save because as a new, inexperience, young RE investor you can't have too much in savings.

So, continue saving. If you have any debt, pay it down as much as you can. And keep an eye on your credit score. Eventually, you'll probably require financing from a bank or credit union. And that financing will depend on factors such as your credit score which is controlled in part by your debt, and your DTI ratio.

Congratulations on the savings, and on the work you've put in so far.

Eric Weireter · Answer

Account Closed - Networking. That's the name of the game. Despite your intention to relocate in the future, I would suggest to continue to network with those in your current market. Among multiple reasons why you should keep networking locally, here are two that immediately come to mind:

• You don't know who investors in your market may know in the markets that you are looking to relocate to. Some investors may invest out of state in the market you looking to relocate to.
• Never stop educating yourself. While networking, you'll see deals that may not be right for you or align with your current goals - but you'll still be crunching numbers and analyzing properties. Better yet, investors like to share past experiences - just hanging around them you'll learn a lot.

While networking locally you can still be figuring out where you want to relocate to and trying to connect with others in that market.

Never let the networking funnel dry up.

Ron Gallagher · Answer

Maybe you saved up a bunch of money for a down payment living in your mom's basement, but if not I would say you keep saving up cash for a down payment in a cheaper market like NC or Texas. Then you can get owner occupied financing, get experience as a landlord by renting out the rest of your property, and not have to pay for property management that you would probably have to have on a property in DC/Woodbridge if you bought and then moved away. Best of luck and congrats for thinking about this stuff when you are only 22!

How to start investing when you want to move

How to start investing when you want to move

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