What is IRR??? What does it mean???

[Aaryan Patel]

What is IRR?? How can I understand that complex formula?? I know that it is a rate of return that factors in the time value of money, but still don't get it.

[Henry Clark]

@Aaryan Patel

Your 14 years old.

Looking at your past posts, your randomly picking topics and asking what is this?

This is a poor way to learn about Real Estate investing, because it is disjointed and random.

Recommend your read books.  Ask for a Book reading list at your level.  Don't ask for the Art of Syndications, as an example.  Don't get specific on Real Estate types.  Learn the fundamentals.

Fundamental:

A.  World level.  The US is a great place for Real Estate investing because: 1.  Property rights, 2.  Rule of Law, versus Rule of Man, 3.  Open financial system., 4.  Stable currency, 5. Foreign Ownership;  This sounds simple, but this is why the US Real Estate market is great, compared to other countries.

B.  Investment level.  Financing, analysis, Deal making, buying/selling, maintenance, property management, etc.

C. Specific types of REI- Trailer parks, Multi Family, Warehouses, etc.

D. Specific types of REI investing- developer, syndication, fix/flip, Hard Money, etc.

The above is an academic learning path.

At a personal level at 14 years old, I would talk with your parents and discuss the following:

1.  Take a loan out.  Whatever you want to buy next, take a loan out with your parents.  Monthly payments for 12 months.  This simple act and what happens over the next 12 months will give you many lessons.  Don't think in terms of success or failure.  Learn why things happened to you.  When you get done, ask yourself what would have happened if you paid cash.

2.  With your parent's oversight, take over maintaining your house.  Plumbing, trash, lawn, roof, electrician, appliances, etc.  Anything that comes up, have your Parents work through you to resolve.  Example:  If you need to replace a ceiling fan and need an electrician.  With your parent standing back and giving guidance, have you find and select an electrician, schedule the replacement, select a new fan, make the payment, etc.

3.  Go through the process of buying a house.  Pick one in your neighborhood first.  Then one in a higher or lower value neighborhood.  Sit with a realtor and have them take your through the offer and the close process.  Find out why people win and lose offers.

4.  When you can drive a vehicle and if there is a trailer park nearby, buy a trailer and rent it out.  Keep it low.  Say $20,000 to $50,000 all in cost.  You will be in charge of selecting and buying, financing, repairs, contracts, tenants, etc.  This will teach you almost everything you need to know about real estate with low exposure.  If you go to college do this and Trailer hack.  Then do 2/3/4 trailers, etc. until you graduate or move.

5. By now, start looking at different REI investment types and strategies.