Any tips for a 20 year old who wants to start investing?
Member since 2020 路 11 posts 路 1 vote
Hi, my name is Jelmer. I own a small software company in the Netherlands called Royalution but i am also very intrested in real estate and building up cash flow. I am already reading many books about investing in real estate and business in general.
What are the key things to learn before i start investing in real estate and what is the best way to learn apart from the biggerpocket podcast, books and this forum?
Any tips?
@Jelmer Hilhorst My biggest tip right now is to house hack. You are young and I wish I would've done that when I was younger. Rent or buy a house with lots of bedrooms and charge your tenants for the room. I assume you will cashflow and live for free. SAVE all the money and buy a property.
Other than the podcasts, my advice is to find your niche or what you are interested in, go to REI groups, also BRRRR strategy is great and it is a good starting point. Best of luck!
@Jelmer Hilhorst My biggest tip right now is to house hack. You are young and I wish I would've done that when I was younger. Rent or buy a house with lots of bedrooms and charge your tenants for the room. I assume you will cashflow and live for free. SAVE all the money and buy a property.
Other than the podcasts, my advice is to find your niche or what you are interested in, go to REI groups, also BRRRR strategy is great and it is a good starting point. Best of luck!
you can listen to all the pod casts and read all the books but until you buy a place you will not learn the ropes. yes you will make mistakes. yes you may loose some money. yes people will tell you they have never lost anything, RIGHT!!! BUT I like to say the biggest mistakes were where I learned my lessons that I will never make again. It is a game but it is an awesome game!! I look at my losses like a college education. you gotta pay to get an education. But in the end it will be worth it. My one piece of advice is to listen to everyone. Remember that everyone does something right, ok that was two things. But in the end you will be glad you jumped into the game!! best of luck!
You can never be fully prepared for the first steps. Don't get stuck reading books! Get some foundational knowledge and then take the leap! Your best education will come from your experience.
Hey Jelmer,
Welcome to the forums! I agree with the other replies. But as you are based in the Netherlands, be aware that there are other rules that apply here. The concepts are the same, but we're a bit less flexible.
You can check out my blog at www.whetstonevastgoed.nl where I'm documenting my RE journey (in Dutch). Check out the first step posts, where I mention the meetups. Very valuable for networking.
Which brings me to the most important thing: networking. I haven't found an active/visible community for the Netherlands as here (mostly because we're smaller, but also because we don't like to talk about money as easily - "doe maar normaal, doe je al gek genoeg"), so that's where the meetups come in. Also, find somebody that you are comfortable with discussing the topics of investing that is already doing it. I have found a great sparring partner in a local property manager and his business partner. Hoping to extend my knowledge and network through them.
Oh yeah, get your savings going. Without getting into details, prepare to have to put down about 30/40% with an investment mortgage.
In which area are you based and where would you like to invest?
Again welcome, and if you have any questions, hit me up!
First of all congratulations!! You are 20 years old and you own your on job!!! Now you want to get into Real Estate. There are so many different pathways you can take, all I can tell you is what I know, which is what I have done...so far. I started my Real Estate venture by house hacking. I have been doing this for the last 3 years and it has been great. It has given me some experience in creating rental contracts, how to find good tenants, how to deal with maintenance issues, and finding a good reliable handyman among other valuable experiences. Oh yeah, and cash flow! After 3 years of house hacking and a few books read under my belt. I want to expand and seek out another Real Estate strategy...BRRRRing!! So I am creating my team and "funneling" properties until I can find my very first one. It might take another week, it might take longer. So what am I saying with all this? ...keep moving forward, do not stay stagnant!!!
@Ramon Flores Thanks for the advice 馃檹
@Moises Villalpando Alright! Thanks for the advice
@Ivor Grisel I am based in Gelderland but i am not sure yet where to invest. What do you recommend? And what is the best strategy to use back here?
@Ivor Grisel I am based in Gelderland but i am not sure yet where to invest. What do you recommend? And what is the best strategy to use back here?
Can't really tell you which strategy to use. It really depends on where you want to invest. Arnhem and Nijmegen area great student cities, but rules are getting more strict. So maybe some of the other cities like Apeldoorn might be better options.
If you want to do a successful BRRRR, you will have to find a below market deal. You almost won't find those on Funda (= MLS-ish in Netherlands), so you'll have to see if you can find off market deals, which brings me back to my last point: network.
My personal experience with Vastgoedbeheer Gelderland is very positive. They might be able to help out with your possibilities.
House hacking might work, but really depends on what you can find. We don't have that many duplexes, so you would be dependent on appartment sharing/splitting. But delve into the rules for that.
You should also check if you can house hack with a regular mortgage in your personal house. Some banks don't allow you to do that. So you might have to get a verhuurhypotheek (= rental mortgage) which means more money up front.
So there is no best strategy, as it depends on so many things: location, money available, network, etc. It's the same as they mention in the podcasts: it depends and get what works in one area doesn't in the other. But I can't stress enough: network with local investors, property managers and such. They can help you with your local market.
@Ivor Grisel Alright, thankyou very much. Im going to build up connections with local investors and find out what the possiblities are.
@Ivor Grisel Alright, thankyou very much. Im going to build up connections with local investors and find out what the possiblities are.
Great! And be sure to hit me up for any questions you have!
Hi @Jelmer Hilhorst! I was in tech and software from the age of 16, and now find myself primarily in real estate. A bit more about what you are good at, people? data? analysis?, whether you think you might be comfortable investing from a distance? How much capital do you have available? What co-workers or other associates do you have, that may be able to your real estate endeavors, and what might they help bring to the table?
Hi @Jelmer Hilhorst! I was in tech and software from the age of 16, and now find myself primarily in real estate. A bit more about what you are good at, people? data? analysis?, whether you think you might be comfortable investing from a distance? How much capital do you have available? What co-workers or other associates do you have, that may be able to your real estate endeavors, and what might they help bring to the table?
I have sent you a dm
@Jelmer Hilhorst Real estate, is a very capital-intensive endeavor, which, generally, the average person doesn't tend to have at what we can think of is the starting line. Using debt, otherwise known as leverage, can work, seemingly like magic sometimes, while other times, more like a freefall into hell, which is known broadly as risk. It's incumbent on you, to generate working capital at this point in your life, while consequently is almost what happens to be what's probably the most difficult time in your life, financially. The more ground that you can cover in your youth, is logarithmically related to your ultimate success. Real estate, is great, however there is somewhat of a steep learning curve, given that, and it is very important that you learn, everything from the basic principles of finance, to managing people and projects. And like someone else said, learning isn't free. Learning is full of trial and error, and huge checks written to colleges and universities, for the purpose of the formal education, which in the end you will learn anyway, simply in the school of hard knocks. Get to know that curve, the so-called curved which the medical profession is interested in at the moment, sometimes called the hockey stick, it's really just exponential growth, and being young, time is your friend. Be patient, a little bit goes a long way, and that's just the way that you want it, especially as you go on to learn, and subsequently make the mistakes, which everyone makes, early on because you have a little more wiggle room. At your age, the best thing that you can do, is to look for areas of arbitrage, which the house hack can be broadly considered to be, and is something that those of us who got ahead, used while we were young, to get ahead. Because it's one of the few basic tools that we had in our toolbox. You win some, and you lose some, do whatever you can though, to turn your losses, into wins, by learning important lessons. Personally, I spent upwards of $100,000 on a formal business education, which is essentially a lot of working capital that you'd be able to make use of, but which is generally available and no charge, from those who have been there, who enjoy reaching out, to pull up someone, who is where, we were at one point in time. Let your focus be on the education itself, the investor's path requires an education, which is something that if you can avoid spending huge amounts of money, upfront when you need it most, will be purely to your advantage. Get in, get your feet wet, learn some lessons, sometimes the hard way is the best way, but keep an eye out for those 'free professors', we're everywhere, and we want to help.
I am new to real estate investing as well and have decided to go the house hacking route to get my first taste of what real estate investing feels like. I think networking and getting first hand experience in the real estate world is going to be beneficial to you. This can provide you a way to learn from others who have more experience and know what they're doing. Partaking in odd jobs that help you expand your network is always an option. Also just a thought, start saving up money and live below your means. This will help you get a good start if you can manage your finances first. Cut out any unnecessary expenses. That is why I am starting out by house hacking. This will allow me to live for free essentially if done properly. Anyways good luck on your venture and I hope you stick with it and have success!
Cheers!
@Jelmer Hilhorst Go. For. It.
Don鈥檛 let anyone who isn鈥檛 in the marathon tell you differently or distract you/discourage you. Believe in yourself and make it happen!
@Jelmer Hilhorst
I would agree with what a lot of people have already said. House hack! My husband an I did that on our first house we lived in and it helped us so much.
Also on top of your current reading/education I would add some personal improvement books too. Maybe something from outside the real estate genre on money management if you haven't already. You have to make sure your mindset is in the right place when you take that first step. So learn everything about yourself that you can now. I'm assuming you've already done that since you own your own business but if you haven't, start now. You'll be happy you did. Good luck with that first deal!!
@Rosalee Oakey
I already have indeed! Thankyou!
You have received a lot of great advice here. House hacking is definitely one of the best first steps you can take and will probably have the largest immediate impact on your financial situation. With the average person spending an excess of 30% of their monthly income just on living, house hacking gives you the ability to completely or partially offset this expense altogether. There are not a whole lot of financial steps you can make that would have this sort of impact right away. Also, to take this step so early in your life will have dramatic long-term compounding affects later in your life so definitely do a house hack!
Another thing I would recommend is opening a couple Vanguard accounts and start dollar cost averaging (automatically investing with every paycheck) into some quality index funds. Your investment strategy over the long-term should include both real estate and the stock market. Hope this helps!