Recent college grad just starting out

[Brennan Doherty]

Hi everyone,

This is my first post on biggerpockets in a couple years, and it's going to be a long one so bear with me! I'm looking for advice on how I should get started.

Im 23 and I recently graduated in January with a degree in finance from Umass Lowell, 0 debt whatsoever. No monthly payments aside from car insurance and my phone bill, totaling roughly 150 a month. I realize how lucky I am to be in that position. I feel like it's also important to mention my yearly salary is roughly 45k at the moment.

I knew I was lucky to have 0 debt so I tried to take advantage, working as much as possible throughout college. Currently, I have 25k sitting in my dividend growth portfolio, adding 250 each week, and another 20k sitting in growth stocks. Then I have roughly 10k (which I'm building on) in savings which I plan to use in the near future for a house hack in the Lowell area. I planned on doing this for the first few years, growing a nice little portfolio of small multifamilys using FHA loans and refinancing. I secured a job at a bank after interning there for about a year, and I've been there since January (they offered me a job upon graduation.) I guess what I'm asking is, what would be the best way to use this money in terms of real estate? My ultimate goal is to be "retired" from my 9-5 by my early 30s so I can make the switch to real estate investing full time. Any advice is greatly appreciated as I know there's plenty of wisdom from experienced professionals on this site. Thank you in advance!

[Jonathan Bombaci]

Hi @Brennan Doherty it sounds like you’re off to a great start! Thank you @Jeremy Wirths for the mention.

203k streamline or regular are great products within the FHA loan programs. The low downpayment definitely has its advantages assuming you plan to live in the property for at least 1 year. While putting 20% down will save you $$ on PMI I would suggest going after a bigger property that has some value add opportunities with a FHA product and plan to refinance out of FHA in a year or 2. This will enable you to buy something bigger with 3.5% down, generate better cashflow, and still have a exit strategy to eliminate PMI and free up you FHA loan to do it all again. That's right you can do this more than once using what we call the FHA ladder. @Forrest L.did this with two 4 families in Lowell in less than a year and I’m sure he’d be willing to share his story with you.

In order to cashflow in Lowell you're going to need a 3-4 family. If you buy a 4 family that needs work you can get it at 3.5% down, do the work, increase the value over the course of a year, or 2. Then refinance out of FHA to eliminate the PMI and free up your FHA loan. Then you can go out and buy a 3 family with FHA again and do the same thing the next year. If you're aggressive and smart about it (use that Finance degree) you can grow a nice cashflow positive portfolio quickly with very little downpayment.

Feel free to reachout to me if you have questions and if you PM me your email and cell phone number I can add you to our email list for our meetups. We’re doing a monthly virtual meetup and we just started a monthly one in Londonderry NH at a place with a large outdoor patio.

Best of luck.
Jon