You're 20 years old again and want to get into real estate...

[Josh Hawkins]

Hello, 

So If you were to go back to your mid 20's and get into the real estate business what would you do how would you do it? I'm moving to Denver in a few months and want to get into real estate as a full time job. The only experience I have, is when I helped a friend completely gut and reno a rental property two years ago. It was an amazing experience learned a lot and reconfirmed my love for this industry. I know I belong in this industry, i just know, and moving to Denver gives me the opportunity to jump right in. I don't have the money to just invest or just buy a house right away. That's why I'm here, I've read Set for Life, I've listen to countless podcasts (bigger pockets and others) but still don't know how or where to approach this industry. Do I flip, wholesale, go commercial (the more I hear/learn about the current residential market in Denver this seems like a a good option). What would you do if you could do it all over again? 

[Bill S.]

Originally posted by @Josh Hawkins:

Hello, 

So If you were to go back to your mid 20's and get into the real estate business what would you do how would you do it? I'm moving to Denver in a few months and want to get into real estate as a full time job. The only experience I have, is when I helped a friend completely gut and reno a rental property two years ago. It was an amazing experience learned a lot and reconfirmed my love for this industry. I know I belong in this industry, i just know, and moving to Denver gives me the opportunity to jump right in. I don't have the money to just invest or just buy a house right away. That's why I'm here, I've read Set for Life, I've listen to countless podcasts (bigger pockets and others) but still don't know how or where to approach this industry. Do I flip, wholesale, go commercial (the more I hear/learn about the current residential market in Denver this seems like a a good option). What would you do if you could do it all over again? 

 Josh, I'm a bit late to this party but would offer my 2 cents. 1) Real Estate agency is ultra competitive. RE is the thing and lots of folks are getting into it. Here in Denver agents incomes are shrinking on the whole just from a nuts and bolts perspective. I believe the total dollar value of homes sold (and therefore real estate commissions checks) shrank the past two years in our market. While it may be a bit counter intuitive there is such low supply that despite the increasing prices the total dollars has decreased. 

2) As everyone else has said, house hack if you can in any way scrape together the funds to buy. If you can't buy you need to figure out the income side of the equation and how to save money.  I don't know you so I don't know which direction to point you with that. 

3) Being in the business of real estate is not the same as investing in real estate. Based on the input I have heard throughout the years, it takes 2 years to get your business off the ground if you are in the sales or self employed aspect. Unless you are in sales or self employed, the real estate industry doesn't pay all that well in most cases. Sure you can still do ok working at a w2 job in real estate but it's the successful sales people that make the income in the business that we all associate with real estate.

4) Don't forget the 1st step of the Set for Life book. The $20k savings.

Come out to the local meetups when you get here and say hi.

[Joel Owens]

I didn't read all of this. Maybe if income is small you rent for now and WAIT. WAIT until Denver or where you want to invest goes on the down slide again and then purchase. You could also potentially by now but purchase a rehab to build equity and and get a better all in rent to purchase ratio.

If you have limited funds buying something top of the market might not make sense. You cash flow maybe 100 a door and then if something bad happens or larger repairs needed you might be under capitalized and get in trouble.

The great thing about once you are established is you can hoard cash and only buy when you get a deal. Sometimes people are so anxious to get started they buy minimal properties and load themselves up on debt with a large loan. It goes sideways and then they can't get anymore properties.

Another option is buy in a new subdivision phase 0 with no houses built yet in the ground. Make sure a large regional to national builder that will finish the project regardless of cycle. The smaller builders might go under if they do not sell quick. You buy stage 0 and then 2 years later when subdivision finished out you might have 100k equity growth or more in some cases. 

Another variable is to start flipping houses and then take so much proceeds from each house to buy long term holds etc. You could also keep some of the better properties you might want to flip and not sell them off. You need to do a sell for equity payoff versus a hold analysis for rental.

I am finding commercial deals for my clients nationally but you have to be patient and find the motivated seller.

[Federico Gutierrez]

Get your RE license and start networking

[Devan Mcclish]

@Brittney Johnson Anyone who says a market is too hot, don't listen to them. Value can be found anywhere you just have to look hard enough. A comment above said Nashville is one of the hottest in the nation, yet I find buy and hold deals every week in and around Nashville

[Mike Jordan]

Hi Josh,

I would highly suggest a hybrid approach of Wholesaling & Flipping to build cash flow up to plug into buy & hold properties, as this way you are building a stream of continual cash flow.

[Jordan Phelan]

@Josh Hawkins - I am also in my mid 20's and can speak from experience that house hacking in Denver has worked phenomenally. I bought my first place at 25, rented out a private room on AirBnB for 18 months and it has covered my mortgage. Also, when I am out of town I rent out the whole house for even more income. There are Denver laws for short term rentals, but the hoops are worth jumping through. Regardless, not paying a mortgage has allowed me to turn around and buy a second house at 26. The first house will still be an Airbnb and is expected to, at a minimum, double it's expenses each month in income. The new house will also be an AirBnB. Both loans have been 3% conventional, so I'm pretty leveraged, but with expected appreciation in Denver and some guaranteed rental income I feel pretty ok about it.  Just wanted to share my experience to give further ideas. My personal strategy is buy and hold, but house hacking definitely opens up a lot of different options when you can creating capital quickly. Good luck!

[Amy Nguyen]

Is Denver a good place to start your real estate career?

[Rich Hupper]

Real estate is relationships with people.  I think the best relationships are with people with money. Find the people who are doing the jobs you want to do and invite them out for food or drinks. Befriend them show them you have an interest to learn the business. Biggerpockets, real estate books, board of appeal and town planning meetings, the registry of deeds, and law libraries have really educated me. 

I had my real estate license for 4 years but was ignorant until i really dove in and started to learn. This business is multi faceted and not easy. However the more you experience and the more knowledge you attain the more money you make.