Rental Property Investor · Chicago, IL · Member since 2020 · 11 posts · 8 votes
Hi!
I'm 21 years old and graduating from college with a computer science degree in 12 months. I have $25,000 in the bank and have the ability to move anywhere to work after college. I can live near Chicago with parents for free, stay close to school (Indianapolis), or move anywhere I want in the United States. I plan on house hacking my first property and then BRRRR-ing thereafter. My W-2 job will pay near $85,000 pre-tax when I start.
The question is... if you were in my shoes, then what would you do? What would you study (books, articles, blogs) in the next 12 months to form a strong foundation? Where would you want to move to get started in real estate?
@Scott Tangney Bias may be here because I'm from Chicago, but I suggest moving home after college and live for free at first. Any way you slice it, you can't lose and it gives you room to actually look for a deal. Househacking is a great idea, but you have to remember that you also need to live there as it's not purely an investment looking at the numbers; which is why I say taking the time to actually look for something is key. PLUS, 25K is unfortunately not a lot of money. Realistically, you need money for closing and stuff so really you can use like 12-13k for downpayment which can buy you a property for under 375K if using an FHA loan.
I highly recommend listening to the Straight Up Chicago Investor podcast and specifically the episode with @Brie Schmidt. She answers a LOT of the questions you have in great depth.
@Scott Tangney. I would make sure I am completely debt free, and mobile, so I can take a job offer wherever it may present itself. Sure, I'd live with my parents for free until I get that job offer. No need to tie yourself down.
Then, when I got that job and moved, I would rent a place for like 6 months while I searched for a 2-4 plex to house hack. I would probably put 5% down on a loan, and try and keep as much cash as possible for my next deal.
In the meantime, I would read a lot on BP blogs, podcasts, etc about how to be a good landlord. A great real estate agent can help you find a property, but who is going to help you once you buy it and you have to be a landlord? You, that's who. Also, if you aren't a handyman, just remember than YouTube has about anything you might need. Of course, you're young, so you probably already knew that.
Oh, and whatever you do, do not buy a brand new car, furniture, etc just because you got that first job. My daughters are in college, and I keep telling them; "live like you're in college for the first 12 months after you graduate and have that career type job".
Edit: I would 100% stay away from either the west coast or the east coast. I have lived on both coasts, and I was always broke. There are dozens of states in the U.S. where you can simply live a better life by avoiding the highest cost of living areas.
@Nicholas Urcuioli thanks for the advice. I'm a more hands on learner too so going to properties is really going to help force me to learn. Since multi family properties tend to be in such high demand, i will really need to understand the market like you said. Appreciate the advice on budgeting.
@Anthony Wick Thanks for the advice - YouTube is awesome. It's hard to come by a 2 - 4 plex in a safer neighborhood in Chicago, but I have time and patience before I need to move.