What in your opinion is the best property to invest at first?

Question

Hey! I'm 17 and I really want to learn about real estate and I've pretty much been able to find something to answer most of my questions but not this one. Is there a type of property that is best to invest in when starting out? If so tell me why! Thankyou!

Joe P. · Answer

Hi @Eli Rollins, welcome to BP. I wish I was as smart as you are starting at 17.

Two things you need to do:

1.  Save EVERY penny. Put it away, find some mutual fund, do something, but don't buy the useless crap that your friends are probably buying. Find a way to save on EVERYTHING so you can work and sock money away. Going out to eat? Try to reduce it and cook a meal yourself for a fraction of the cost. Got a gym membership? See if you can do the majority of your workout at home for free, or at a park somewhere. Bike ride instead of drive. Share a Netflix account with someone else. Before every luxury purchase, ask yourself if you truly need this.

2. Decide what your RE goal is. Make it quantifiable and realistic. E.g. "I want to own 50 doors by the time I am 40, and each door will have a cash flow of $1000 per year, so I will cash flow $40,000 per year."

Now, to truly answer your question, many people househack and I wish I had done this when I bought my first house. Your living expense will likely be your largest cash drain. If you make $1500 a month and you pay 30-40% in rent...it kills your chance of saving money realistically. So, eliminate that cost! Save every penny to invest in a multiple bedroom SFH, or multi-family place and house hack it. You live in one bedroom or one unit, and rent out the others. Run the numbers so if you have 3 units to rent for example, the monthly rent covers your mortgage (and hopefully more!). You live scott-free as others pay your mortgage, and you learn the ropes of managing properties and tenants. All the while the money your friends are paying for a mortgage, go right back into your pocket for investing in the next property, and then the next, and then the next.

Finally, I implore you to READ and LEARN as much as you can about R.E. investing to open yourself up to the multitude of ways to get into RE investing (house hacking, wholesaling, syndication, flipping, etc.) and you'll find something that burns a passion into your soul and you can adjust or enhance your goals as needed over time.

Good luck!

Jeremy Taggart · Answer

@Eli Rollins House hack a small multi unit. Very little risk and it is essentially training wheels for being a landlord. If you utilize an FHA loan and a 6% seller assist you can acquire a property for very little out of pocket and live rent free.

Theo Hicks · Answer

Hi Eli,

To echo the majority of the advice in this thread, I would house-hack. Aside from it being the cheapest option (i.e. the lowest down payment) and the reduction in living expenses, it is the easiest way to get your foot in the door, which IMO is the most important part. Reading books and listening to podcasts is great, but once you have saved up enough for a down payment for an FHA loan and have the income to qualify for a loan, find and buy a 2-4 unit.

Eli Rollins · Answer

Thanks Jeremy and joe this really helps! I've been thinking about buying a triplex or quadraplex as my first investment. And I've been trying to learn as much as possible without burning myself out.

Thomas S. · Answer

Good advice on how to start. How to get there is also very important. Your young, now is the time to instill good financial habits, live frugally, associate with like minded individuals, find friends that come from money, don't waste money on girlfriends, don't get married until you are financially established, don't marry any one that does not share your investment interests and goals.

Number one rule look for the highest paying career path you can achieve.. You need a high income to secure maximum financing and to save for your DPs. Levrage is essencial to grow.

Choose your friends, don't let them choose you.

Karen Rittenhouse · Answer

@Eli Rollins The best property to invest in is the one you find that's a good deal. It's almost impossible to pick a type of investing because you never know who will call and what type of deal they will have to offer. Be prepared with your network of investors to offer any deal that you can't handle to, so you can say yes to whatever comes along.

Good luck.

Eli Rollins · Answer

This was a helpful post Gilbert thanks for sharing!

Gilbert Dominguez · Answer

The very best type of property to buy to get started in real estate investing is one that meets all of the criteria needed to be able to make a profit and/or grow you wealth plus afford. One you can afford and have a real opportunity to get it in your control or ownership and that can be just about anything provided the conditions are right. It could be something you simply got knowledge of through hearing a conversation, something you just happened to walk by or come across during a drive, something advertised in a paper you happen to pick up, or something you diliberated searched for.

Typically most things do not start out being the best thing you could get started with. It may turn out that way depending on what unfolds after you get into it. If it fits your financial situation etc. etc. The more experience you get then you are better able to identify what has produced good result for you in the past. In this forum several people give examples of what turned out good for them, that you may pick up a point or two on what to look for and how to find it. You are even given pointers on how and where to get money when you need it. I suppose the best property to get started with you already own, your brain. !!! There is nothing you can buy that will automatically skyrocket you to the head of the line.

We tell people , they should first learn as much as they can from those that have experience. It is knowledge and understanding, and knowing where you are at and having the capability to exerise intelligence in selecting what is best for you to get started with. The better you prepare your self and arm yourself with knowledge the more things you will find that fit with you that will increase the chances of you succeeding upon discovery will turn out to be the best thing for you to get started with.

There is no specific type of property just sitting there like nuggets of gold that can assure anyone who finds it and gets started with it will have instant success. It is finding what fits with you and also something that is an intelligent buy according to what you will know what to do with it.

What I am saying is educate yourself first. Like I said, the best piece or type of property to get started with you already own, and it's right between your shoulders.

This probably is not the answer you were looking for but it is what it is, and better to find out sooner than later.

What in your opinion is the best property to invest at first?

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