Should I wait to invest in RE until I finish school?

Buying & Selling Real Estate
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Should I wait to invest in RE until I finish school?

Tyler D.
Member since 2019 · 219 posts · 99 votes

I'm a 29 y/o student and veteran. Currently I'm sitting on a lot of dry powder. About 150k in liquid cash as well as an unused VA/ FHA loan. I own one small SFH that I bought with cash and want to continue growing my empire (with leverage at our historically low interest rates), but I'm finding it very difficult to get qualified for loans.

I have a solid monthly income through the GI BIll, which is enough to cover my monthly expenses and more, but lenders will not consider it because it is not taxable. 

Since I'm persistent, I've been ramming my head at the wall trying to find ways to finance properties, without a whole lot of luck. There is the rule where you can use 75% of rents to offset the mortgage, but that requires financing a property that is occupied, which seriously limits my options to find deals.

Add to that the uncertain short-term future of the real estate market, and I'm wondering if it may be best to sit it out for the next few years, and hit it hard once I'm finished with school and have a real W2 income to back me up.

My main concern is that my stack of dry powder will wither away due to inflation, and I'm not exactly eager to throw it into something else like the stock market to preserve it right now. I feel like real estate is the safest option. Add to that the fact that real estate is a slow process, and I want to start building sooner rather than later, to better set up my future.

Your thoughts?

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  • Brett McManus
    Minneapolis, MN · Member since 2020 · 94 posts · 161 votes
    6y

    Hi Tyler, 

    Have you considered House Hacking at all? I just recently graduated from College and found it to be the easiest way for me to jump into investing all while limiting risk and keeping my cash moving. Looking into a duplex would allow you to live in one half with the other half rented out providing some experience working with tenants, possibly some light rehab work, and ultimately some pen to the paper to move forward with down your real estate path. My first duplex purchase was by no means perfect but was well worth what I learned throughout the process. This could potentially shine a lot of light on where you want to move with your funds next. 

    Of course, take this with a grain of salt not knowing the area you are looking to invest in, price of homes, etc. 

    Feel free to let me know if you have any questions! 

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  • Tyler D.
    OP
    Member since 2019 · 219 posts · 99 votes
    6y
    Originally posted by @Brett McManus:

    Hi Tyler, 

    Have you considered House Hacking at all? I just recently graduated from College and found it to be the easiest way for me to jump into investing all while limiting risk and keeping my cash moving. Looking into a duplex would allow you to live in one half with the other half rented out providing some experience working with tenants, possibly some light rehab work, and ultimately some pen to the paper to move forward with down your real estate path. My first duplex purchase was by no means perfect but was well worth what I learned throughout the process. This could potentially shine a lot of light on where you want to move with your funds next. 

    Of course, take this with a grain of salt not knowing the area you are looking to invest in, price of homes, etc. 

    Feel free to let me know if you have any questions! 

     Hey Brett, I would do house hacking if I could, but I live in the bay area. That probably explains itself.

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