How is my plan?

Question

Hello everyone,

I am new to bigger pockets and just discovering the AMAZING potential to have financial freedom through real estate. I have been researching alot and listening to alot of podcasts and I am really looking into taking this opportunity to build wealth and success.

I am currently a 22 year old senior in College I plan on graduating with an accounting degree this upcoming December. After learning about real estate I really feel as if I don't even want to use my degree and instead just go into real estate. I have a wholesaler in my area  (Dallas, TX) that I was thinking about getting mentored by for a year. He has been doing it for a few years and I believe I could learn a lot from him. He charges $3000 up front and then we partner up and split all of my deals for a year. He also lets me receive my 3k back on my first deal before we split the rest of them. I am not sure if this is a good deal or not. My other option would be to find a job as an accountant and try to invest on the side. I plan to save up enough money (Im not sure how much I would need to be secure) to purchase my first investment duplex (stay in one unit and rent the other unit out). In 7 years I would like to have enough passive income to where having a job isnt a necessity. I feel like I have a lot of potential and drive to be successful but I am just not sure how I want to start off. Any tips or suggestions from all of you successful individuals would be greatly appreciated. :)

Karen Rittenhouse · Answer

Welcome Kennedy Williams! 
I'd like to invite you to read my post on Beginner Basics here on BiggerPockets - http://www.biggerpockets.com/renewsblog/2013/02/26/beginner-business-basics/

Two of the greatest places for you to learn about investing and about your local market is at your local real estate investor meetings (which you can find at www.NationalREIA.com) and your local landlord association meetings.

I always recommend a w2 job to pay the bills until your real estate business is doing well enough to take over. This business can make you great income and create wealth faster than any I know, but it still takes time. We had 25 properties before my husband was able to quit his w2 job and join me in the business. Even then, it was a financial struggle.

Don't set your sites too high because you don't want to set yourself up for failure. Slow and steady wins this race. Join investor groups, get educated, start investing, give yourself time to learn the business, your favorite forms of investing, and your local market. Understanding accounting will put you way ahead in creating your investment company.

Congratulations to you!

Michael D. · Answer

Kennedy Williams - Congratulations in advance on your upcoming graduation. That's a big milestone, and hopefully will add value to your life in some respect. If Real Estate is your calling, I can absolutely guarantee that your accounting degree will not go unused.

I'm a big believer in the power of keeps options open and pursuing multiple paths. This makes you very flexible in what you can do and the opportunities that you can take advantage of. A job is a powerful thing to have when starting out in real estate.

My humble suggestion is to put 100% of your effort into an accounting career, perhaps even going after a CPA license. Put the other 100% of yourself into real estate, maybe with this mentor. Working full time, continuing your education, and building a RE empire on the side will keep you busy, but you will not be poor. Think of your job as your RE accelerator. You'll build cash reserves faster and get much better financing. Plus you'll be networking with other professionals that may also help in RE somehow. As a buyer or seller perhaps.

So, so many advantages to having a job, especially one that demonstrates proficiency with dollars.

Best of luck, and keep us in the loop on your progress.

Oh yeah, your mentor buddy doesn't sound too expensive. Could be worth it, or he could be wasting your time. The key is to figure out if he has actually done any profitable deals in the last 12 months.

Michael

Dan Shoemaker · Answer

Kennedy,

Michael D. offers some very sage advice.  If you can validate your mentor's success, he/she can be an invaluable resource to your education in real estate.

Whatever you do, avoid getting comfortable with a salaried career.  Stay hungry, work hard, and do what most of your colleagues are not willing to do for the next few years, and you will be able to do what they CANNOT do for the rest of your life!

Jeff S. · Answer

Kennedy Williams - Welcome to BP!  You have so much sage advice above I think you are good to go.  I think that $3k would go a long way towards preparing and paying for the CPA exam.  Best of luck and hope to see you on the forums!

Kennedy Williams · Answer

Thank you all for your helpful tips. I really appreciate all of them.

Troy Fisher · Answer

Cross-pollinate!  Use your accounting degree to get a job in some real estate job!  Work on getting your CPA designation with a Real Estate Focus.  You want an unending pipeline of deals?  If you build up a reputation as a Great Real Estate CPA, and that you invest too you'll probably get clients that want to do JV's with you!

Mark Tamondong · Answer

Right now, real estate should be your second best option. You should first focus your career and yourself in your own field - accounting. Real estate is a very huge market and it also comprises financial aspects, in which your accounting degree might help - so better nourish it first before you jump directly into RE.

Create a timeline, a schedule for yourself that will separate both your accounting career from RE. You can work 5 days a week under an accounting firm, while learning and reading a lot, engaging on networking events by realtors during the weekend, then slowly join and inquire on the process of becoming an investor or a realtor through a real estate company, work you way out while still maintaining your accounting career.

In the end, if you are able to maintain both opportunities, you might find yourself getting more options in the future to nourish yourself professionally in other industries.

Lynn McGeein · Answer

I agree with Bill Gulley and Michael D., starting out with a career in your field of study, and also looking for internships right now during your last semester so you can start with education and experience.   Both my children graduated in the last 3 years, entering a very bad job market.  My son was hired by the company where he interned, didn't miss a day, just higher pay the Monday after graduation.  They didn't count college or internship in his work history for his home loan, so maybe the rules have changed as we told him they would count it, but they wouldn't.  But he still qualified for his first home 2 years later, and got roommates to help pay for it.  He and his friends started a business that they work on nights and weekends.  He's hoping it eventually lets him quit his job, but right now, he can build the business he wants without worrying about bills.  My daughter did not have an internship.  It took her 6 months to find an entry-level position, sort of in her field. She is very interested in real estate, but knows that income and down payments and good credit are essential, so she has her entry-level job M-F, works weekends as a server, and rents an apartment with a roommate to keep expenses down, saving to buy her first home.

Only you can decide if trusting in this wholesaler is a good move for you, but if you plan on doing both, career and wholesaling on the side, then you're moving forward either way, not limiting yourself.  It can be detrimental to wait on a career using your degree as you'll be competing with a whole new crop of graduates and interviewers asking you why you didn't want to work in that field to begin with.   You can choose both, and be better off for it.

Bill Gulley · Answer

Welcome to BP!

I'd suggest you get a job! You need the income to qualify for loans and if you are working in your degree, you can qualify without getting two year employment or income history....this only applies as you get out of school! If you go into RE it will not apply, you'll be self employed and you'll need two years tax returns for qualifying income, and most likely your worst income is early on so it could take years to qualify for loans to buy properties.

You can also do real deals with a job, you won't need to split wholesale deals that are usually pretty thin profits anyway.

I'm also against paying a mentor. You should be able to do work for them in return. If you had the guy a fist full of dollars, what keeps him teaching you and not just sluffing off? :)

Karen Margrave · Answer

Kennedy Williams Welcome to BP. It's great you're jumping right in with posts. Have you filled out the keyword alert yet? Maybe for your city, Texas,  buy and hold or ?

As for the mentor idea I've never done anything like that, but it seems to me there's better ways to gain experience. Maybe some of the other people from Texas will weigh in.

Bill Gulley always has some sage advice, as does Jon Klaus

Good luck. Be sure to read the Beginners Guide to Investing under "Learn" at top of page

How is my plan?

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