General Question About Education and Student Loan Debt

[Robert Ashline]

Hey guys, I have a very specific and personal question that I'm sure will spur many different answers and opinions. I am 23 years old and I am currently still a freshman in college, I started late back in the Fall of 2018. I am attending a community college where two semesters cost me on average about $5,000. I am majoring in accounting because my goal is to turn my real estate investments into a well operating business. However, I am questioning if an undergrad degree would be worth the student loan debt while I am also in pursuit of acquiring investment properties. I do not have to start making payments until 2023, but that monthly payment down the road could affect my future prospects of positive cash flow. I currently work in healthcare administration full-time with great benefits and a 401k plan. I am living frugally and saving 40-50% of my income to build a down payment fund for my first buy; I'm going to house hack with an FHA Loan, I plan to buy in 2020 with 10% down to reduce monthly payments. In your own opinion, would it be more beneficial to focus on working and side-hustling to save up, while also focusing on real estate investment? Or would an undergrad degree be worth the student loan debt in the long run with my long-term goal of turning my real estate investments into a business? I understand that this is a very personal topic and one that only I can decide on, but I would appreciate the opinions and insights from the BiggerPockets community.

Thank you guys!

[Scott Mac]

Hi Robert,

You do not need an accounting degree to be an investor. They will not teach investment accounting to you there.

To understand the accounting involved spend some time (and some fees) with a local "Real Estate CPA" and ask them to explain investor accounting to you.

Before you do this:

• Understand what a chart of accounts is for an LLC and a Sub-S Corp.
• Understand how depreciation works for rental housing.
• Understand what a 1040 is and what schedules an investor may need. 
• Skim the IRS instructions for depreciation.
• Read Rich Dad Poor Dad (if you have not already), while not a true to the book picture of accounting, it is a good way to think about it.

Basically you want to know how the cash flow and depreciation flows onto your personal 1040, and what is the best way for an investor to work with a CPA.

And knowing a CPA that can assist you in your investment business is better than paying a college to teach you how accounting works. 

Let the experts do their thing--and you do yours.

Good Luck!