Funding my first REI

Buying & Selling Real Estate
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Funding my first REI

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Real Estate Investor · Stockholm, Täby · Member since 2015 · 55 posts · 2 votes

Hello BiggerPockets!

I'm an seventeen year-old aspiring investor, and I would like to hear your suggestions.

 For the moment, I study the International Baccalaureate program which is slightly demanding. Except for that, I work about 8 hours per weekend at a local cafée, which brings me about 11.5 $ / hour, of which I save at least 80% for RE. I will have about 4700$ of my own assets by the end of the summer, not mentioning being able to lend from home.

Except for school, working, networking with otehr realtors, investors and people in my surrounding, I'm studying the theoretical part of RE. 

My goal is to cash flow 2100 $ per month by the summer of 2017. Might sound like a lofty goal, but I have several plans.

Option one: Get one apartment that my family has, it's a three room apartment of which I could rent out 2 of the rooms for about 580 $/each, which would generate 1160 $ per month in passive income, using what you call house hacking. This might happen within one year. However, I can not depend on this outcome. I want to buy houses that need a major fix up and then either rent them for passive cashflow, but rather resell and continue to do that until I can buy a duplex/triplex/multifamily home to get my 2100$ cash flow/month from "one roof". I will of course try to build my track record for hard money lenders, or other credit unions or smaller financial institutions. My weekend job + a track record might back up credibility.

I want to know your opinion guys, how to start out and how to pursue this 2 year challange. Tell me that my goal is lofty/irrational? Bring out your history book and look what Alexander The Great managed to do on his Persian expidition whithin eight years. My goals are fully rational, even if they will require me to lack some sleep some nights, or skip casual activities. 

Thank you guys for your time reading and answering!

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  • Darrell Shepherd
    Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes
    11y

    Start reading everything you can get your hands on and hanging out in these forums.  I sure wish I'd had started at 17.  I read "Nothing Down" when I was 21 or so, but didn't buy my first investment house until I was 28 I think.

    Sounds like you're thinking straight.  Buy something and let someone else pay for it off for you, at your age you should be able to rent rooms out to peers pretty handily, plus living alone sucks.

    One flip will give you $2100/mo for a year if you do it right, that kind of income is pretty low for rehabbers (the ones that know what they're doing anyway). It'll take a few rentals at $2-300/mo to get up to that, OR you can do a couple of flips and put some real money down on something. A lot will depend on your market. I converted two to rentals last year when they didn't sell. Got less than $40k in one and around $50k in the other. They are bringing in $850/mo each. I sold one in November I had $52k in that was paying $940. If you can get around those numbers you should be in good shape assuming they are nice at that GRM.

    $5k wouldn't get me through a week, so you'll have to leverage money and time. You'll also want/need a partner on your first one or two, both for credibility and for mentorship. You actually wont be able to borrow money in the states until you're 18, but past the age, the first thing a lender is going to look at is ability and intent to repay and, while $11.50 and $4,700 saved is impressive at 17, its not going to give a banker warm and fuzzies about loaning you $100k. I's say start going to REIA meetings and chatting things up with guys doing deals is where to start.

    Good luck!  Keep with it, this is not a get rich quick kinda thing, it takes perseverance.

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  • Josh Caldwell
    Investor · Dallas TX, United States · Member since 2014 · 1k+ posts · 1k+ votes
    11y

    your logic is sound and you path to get there makes sense.  You goal is sort of small.  You can crush that by 2017 if you work hard at it.  Real estate is not a get rich thing, it is a get rich by working hard thing. I hate to tell you this but you can make a lot more money with real estate than you can with your degree. I would reshape my goal if I were you.  I would look at your degree/career path and see what you expect to make in 10 years, then double that number and make 1/12 of that your monthly target. 

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  • Josh Caldwell
    Investor · Dallas TX, United States · Member since 2014 · 1k+ posts · 1k+ votes
    11y

    I cant help you with the laws of Sweeden, but partnering and markting are in my zone.

    What are the laws on direct mail marketing in Sweeden, is that permitted?   Secondly what is your access to list sources of public info? 

    Can you track burned out landlords, through tenant eviction records?

    Can you track notice of mortgague defaults?

    Either of the above lists will get you a herd of motivated sellers. 

    How about job tranfers?  Can you track that info?

    How about divorce?

    Now back to partners.  All you need for a partner is someone with a bit of a greed bug, and something that you dont have.  In most cases either time or money.  In my case its time.  I have a lot of demands on my schedule, so I partner with a lot of people who bring in deals, and I tell them how to negotiate the deal for maximum profit. To be honest, if you are only working 8 hours per day, you have all the time that you need.  I have a student who works 24hr shifts and he has time on his days off to make money in real estate.  You can do what we do in 4 hours per week and still do a deal per month. 

    I hope that helps

    Josh

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