Rental Property Investor · Fairfield, CT · Member since 2018 · 47 posts · 27 votes
Imagine if you are out of college on a full scholarship. No debt. A credit score of a 709. In the interview stages for potential employers for engineering jobs. Looking to build wealth to set yourself up for more freedom.
Knowing what you know now, how does one get started in REI? Hoping to discuss different strategies for an aggressive approach to building wealth. I refuse to take the "normal" route of stock market investing.
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
8y
You are in a perfect position. I would not invest out of state, at least for your first deal. Find a duplex/triplex that needs a little work, live in one unit rent out the rest. Repeat. Do this four or five times and you'll never have to work again if you choose. You can do it. Good luck.
Imagine if you are out of college on a full scholarship. No debt. A credit score of a 709. In the interview stages for potential employers for engineering jobs. Looking to build wealth to set yourself up for more freedom.
Knowing what you know now, how does one get started in REI? Hoping to discuss different strategies for an aggressive approach to building wealth. I refuse to take the "normal" route of stock market investing.
Get a job first where you have W2 income. Find deals in your market. Buy at discounted prices. Rehab. Rent. Refinance. Repeat
Rental Property Investor · Fairfield, CT · Member since 2018 · 47 posts · 27 votes
8y
@Allan Rosso that's for the response! I want to know about how I can start investing with with $5k. I'm looking for small purchases first. However. I am seeking a mentor as well to help with the process. Ive done a lot of reading and studying on the market and I know how to underwrite deals and calculate cash flow.
So it's more of getting the money first. Is there another way to do it besides buying and flipping?
Rental Property Investor · Fairfield, CT · Member since 2018 · 47 posts · 27 votes
8y
@Chris Purcell thank you for your response! Connecticut is very expensive and I am looking to possibly look out of state. However I know it may be harder to look out of state. However, a flip in CT can be very profitable
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
8y
You are in a perfect position. I would not invest out of state, at least for your first deal. Find a duplex/triplex that needs a little work, live in one unit rent out the rest. Repeat. Do this four or five times and you'll never have to work again if you choose. You can do it. Good luck.
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
8y
@Tony R Fox a great place to start would be with reading a few books including Set For Life by @Scott Trench. I think it is great that you have no school loan debt and you have 5k saved up so far. However, 5k is not very much to start investing in real estate. I would suggest, if you are single, to live as cheaply as possible for a year or two. Save up as much as you can and resist the urge to increase your standard of living even though you can afford it. You only would need to do this for a short period of time to save up 30-40k if you get an engineer's salary and live very frugally for a short period of time. Then you will be in a better position to start investing.
So often in todays society people spend their money as soon as they get it. Or worse yet, they spend it before they get it. This is the mentality of the majority of the people in the United States and the majority of the people in the United States live paycheck to paycheck and have to borrow money whenever any sort of emergency comes up. So if you want to be wealthy don't do what the average American does.
Investor · . · Member since 2017 · 173 posts · 84 votes
8y
@Tony R Fox I agree with @Chris Purcell that a W-2 job is one of the first steps. Getting started with $5K will be tough, and without a job you most likely can't get financing.
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
@Tony R Fox. What type of engineering are you?
I was in the exact same position 2.5 years ago. Now I’m an engineer and an investor. Get a job Is step 1. Step 2. Save 50 percent after tax income. Step 3. Buy property. Repeat
Real Estate Broker · Madison, WI · Member since 2015 · 14 posts · 32 votes
8y
@Tony R Fox -- If I were you, I‘d focus on your active income. Best returns you‘ll get right now.
Income from RE investing is slow and boring (in a good way). The RE investing that makes fast money is not really “investing”.. it’s a self-employed RE business. For example, flipping, dealfinding, wholesaling, syndicating.
Renter · Las Vegas, NV · Member since 2018 · 278 posts · 71 votes
8y
Tony, I would say that boosting your credit score is the no-brainer investment, then possibly starting a LLC and boosting your business credit (may take two years) are the best investments for now. We are just past the top of the market so any investment you make in RE or stocks is risky. If you are one of the few grads with savings that you can afford to lose, then an investment into bonds is the way to go assuming we are on a downward slope. Wait for interest rates to peak, lock-in bonds and wait for interest rates to drop, then cash those in, and go heavy into RE with your 800 FICO and seasoned LLC powered by the large down payment ala your Bond investment. Think 10 years out, not just today's BP excitement.
Rental Property Investor · Fairfield, CT · Member since 2018 · 47 posts · 27 votes
8y
@Caleb Heimsoth I majored in engineering physics! I was actually just offered manufacturing engineering position yesterday! So I'll be starting Oct 1. I need to create a nice budget in order to save to investments
Rental Property Investor · Fairfield, CT · Member since 2018 · 47 posts · 27 votes
8y
@Chase Binnie slow and boring and passive is what I want! I'm not too much into flipping. However, i know it is a strategy most people use to buy bigger purchases
Rental Property Investor · Fairfield, CT · Member since 2018 · 47 posts · 27 votes
8y
@John Acheson very very interesting strategy. I appreciate that. I've wanted to start my own LLC for a while. If you can elaborate, how does an LLC benefit the REI process? Are lenders more likely to approve loans?
Rental Property Investor · Bakersfield, CA · Member since 2016 · 58 posts · 27 votes
8y
@Tony R Fox
Biggerpockets is notorious for the no and no money down niche, but you really need to have a good financial runway prior to inveating otherwise you will lose your bottom when it goes sideways.
As far as plans go, I would look for a 2-4 unit too house hack. You can get into these with 3.5% down for an owner occupied FHA loan. Great way to get started FHA makes sure its a cashflowing deal before they allow you too buy. And house hacking allows you to make a little off the property, and seriously subsidize your rent.
And lastly, you gotta live like a college kid. Rent out rooms, go the cheap route. Having those cheap expenses will really catapult you forward financially!
Madisonville, LA · Member since 2018 · 125 posts · 71 votes
8y
@Tony R Fox
First off your in a great position. Good job to make money and setting yourself up early. I would focus on building up some funds for the next year or two as it will give you far more options. And continue to educate yourself. If you skip the 401k for maybe a year and can live conservatively you should have a nice amount to invest in a year. Your loan options will also be better with a year of stable employment. Great spot to be in!
Real Estate Investor & Consultant · Los Angeles, CA · Member since 2016 · 620 posts · 386 votes
8y
@Tony R Fox intern with a flipper. Intern with a wholesaler. Intern with Rental Investor. Then decide what you want to do long term. You have a long journey ahead. Learn what you want to do now and you'll have time to make millions.
Investor · . · Member since 2017 · 173 posts · 84 votes
8y
@Shawn Ward very good point my man. Doing an internship with someone that is serious about their business, and then making sure that you're just as serious about their business as they are, is an awesome way to gain invaluable experience and support for yourself in the long run .
Imagine if you are out of college on a full scholarship. No debt. A credit score of a 709. In the interview stages for potential employers for engineering jobs. Looking to build wealth to set yourself up for more freedom.
Knowing what you know now, how does one get started in REI? Hoping to discuss different strategies for an aggressive approach to building wealth. I refuse to take the "normal" route of stock market investing.
I did exactly this 2 years ago. I graduated with my masters in architecture, no student loans and a solid chunk of $ in the bank. I bought a 4 family where I house hacked, fixed up the units, and really increased the rent. I then went on to buy a SFR where I moved into and rented out a few of the rooms.
The most important thing is to have your $ ready. Try to get that credit score up over 740, as it will save you some money in interest. You can read my story here:
@Tony R Fox
Get a job. Will need w2 income. Then research rules for fha/first time home buyer in your area. Buy a 2-4 plex, with as low money down as possible. Close to work would be nice. House hack, while learning how to be a land lord. In 1-2 years refinance or get a heloc loan. You now have the money to start your next deal. Learn and grow.
Best of luck.
Investor · Salt Lake City, UT · Member since 2016 · 287 posts · 270 votes
8y
@Tony R Fox I also suggest you read Scott Trench’s book “Set for Life.” I’m reading it now and it’s a great read. In it he gives very god and pracrical advice. He suggests once you have no credit card debt that you save up around $25k and then purchase a “house hack.” If I were you this is exactly what I’d do and as soon as you can. You could buy a Fourplex, rent out the additional units and even rent out any spare bedrooms in the unit you are living if you are in a position to do that. You can do this by putting down as little as 3.5% and you will get a really good interest rate. If yoI do it right you will reduce your living expenses to zero and even possibly get paid to live there. You will be required to live there for at least a year. Once that year is up you can repeat the process using money you’ve saved up in the previous year. When you move into your next Fourplex you will now be cash flow positive in your first purchase and still living for free. Keep doing that process 5 or 6 times and you’ll have 20 units in your first five years.
I have been living in a house hack for the last five years and it’s been fantastic. I bought mine about three years before discovering BiggerPockets but plan on repeating the process here shortly. Good luck!
Fresno, CA · Member since 2018 · 17 posts · 11 votes
8y
@Tony R Fox aggressvely save money and buy a Multifamily 2-4 units with 3.5% FHA loan and house hack. Raise the rents to market values and rehab to force equity and sell in 2 years to avoid capital gains. If you decide to keep the property you can refinance into a conventional loan and hopefully you have enough equity to eliminate the PMI/MIP. Then move out and repeat the process.
Qualifications for FHA are minimal. Call your local bank to find out more info.