What is the BEST first move to make in the real estate game ?

Question

I am a 21 year old from chicago, just got my real estate license, but I want to start my investing now as well. I have cashed saved up and have somewhat of an “equity partner”. With that said, I can kind of do anything on this first move and I’m wondering what’s the best way to jumpstart my real estate portfolio?

Jonathan Styer · Answer

If I could go back, the first home I bought would have been a house hack instead of just an owner occupant home. I still own it and it cashflows great for me. BUT if I had bought a double, I would be doing even better. If you can do it, that's what I would recommend. Come as close as you can to living for free and save that money for the next investment. Good luck!

Dan Weber · Answer

Buy a 3-4 unit building, live in one unit and rent the other. Hands down the best way to start. You mentioned you just got your real estate license. Before you quit your job to do that full time, I'd keep the W2 job in order to qualify for a mortgage to get that first purchase. After you close, then go the self employment route.

John Warren · Answer

@Joseph Sapyta house hacking a 2-4 unit is just about the best possible thing you could do as a newer investor. Buy in the best neighborhood you can afford (where you see cash flow) and let time do it's thing. At 21, you will learn so much about investing long before you turn 30 and you could easily be a multi millionaire just by picking up a few house hacks in your 20's.

Tom Shallcross · Answer

@Joseph Sapyta - all the above comments are great advice. To fully understand if your potential househack is a "good" deal you need to dive into the neighborhoods and establish a baseline. If someone presented you a building right now, how would you determine if it was a good deal? Get to understand comps, rents, and more importantly what drives ARVS and rental prices. This is all free information and relatively easy to gather. By doing this work up front you can make a confident decision instead of being stuck in permanent analysis paralysis when evaluating deals.

Crystal Smith · Answer

I've seen & know people to be successful in every niche. What's common among them:They treat it as a business, not a hobbyThey built a support network- lenders, private $, contractors, other investors, realtor, attorney, ......They had multiple mentorsThey studied their niche and know it wellThey built and/or purchased systems to support their businessOnce they became smart at implementing in one niche they pivot to another nicheThey are continuous learners

Crystal Smith · Answer

Seems to me that you've started your first steps by getting an equity partner. That's a good first step because this game is about raising capital for deals. My opinion- Your next step should be figuring out what part of the real estate game you want to play in. Do you want to flip single, multi or commercial properties (Yes you can flip commercial properties)? Do you want to learn how to syndicate deals and start buying apartment complexes? Do you want to build a portfolio of small multifamily or single-family homes to hold? My recommendation is not to find a multifamily and house hack yet? My recommendation is to study, study, study.... There are syndicators on this forum- Find them & learn. Maybe consider getting your commercial license. There are flippers on this forum- Find them & learn. Since you have your license- Consider hanging it with a real estate firm that's filled with investors. Again find them and learn. Start building your network. Apartments - There are property managers on this forum who are also investors. Part of the Real Estate game is not just buying buy managing. Find these guys and learn. Maybe hang your license with one of the firms. The objective would not to become a property manager but to learn.There are some who concentrate on only lending money; i.e. private lenders. Could that be your niche? Since you have a license you can wholesale. Could that be your niche.I could go on but using your words - "I can kind of do anything on the first move"- Your first move should then be to study the real estate niches & decide which one most appeals to you & jump in.

Joseph Sapyta · Answer

@Jonathan Klemm I’m thinking multi family 3-4 units. Preferably in a nicer neighborhood I’m so I’m looking more north but if you know any good neighborhoods to look please let me know, along with any other help, feel free to pm me we should talk

Aaron Zimmerman · Answer

I agree with John. House hacking is the best first step because you need somewhere to live. The biggest thing is to make sure it cash flows when you leave and enjoy the neighborhood you live in.

Jonathan Klemm · Answer

@Joseph Sapyta - Congrats on getting your real estate license! I always suggesting find a good partner or mentor to get going. Find someone who is doing what you want to do and learn from them. It's a lot less costly to learn from other mistakes instead of your own, Im speaking from experience hahaWhat are of Chicago are you looking to invest in?.

Joseph Sapyta · Answer

@Crystal Smith super helpful, thank you!! I am definitely in the stage of figuring out which types of RE I want to focus on. I see you’re in the Chicago area, have you noticed certain niches that do best when it comes to REI ?