I am 20 years old and Currently working at a development company, mostly clean and help out where needed. The goal from day one is to learn how to invest on my own eventually, I can feel myself getting impatient and trying to learn on my own reading books talking with mentors, and trying to learn how to analyze a property to assure it's a good investment and or how to find a reasonable investment, especially in this market. I have 37k saved up and am eager to start as I feel at this point learning by doing it would be the best route. I do not want to make a bad investment decision or rush the process. If anyone has any advice or thinks waiting and just continuing to learn is best or jumping in. Any advice is the best advice for me and or any resources anyone has to share would be very helpful. Thanks for your time in advance.
Rental Property Investor · Jericho, VT · Member since 2021 · 28 posts · 19 votes
4y
Hey CJ sounds like your on the right track. In my opinion the first deal is pretty important and in my experience the hardest to acquire. After that first deal you learn the process and will naturally have more experience and become more comfortable. I spent a great deal of time educating myself and buying used books on eBay. I think these used books are really the best investment I ever made. I analyzed ALOT of deals to understand my market, and I made sure I had reasonable reserves. If you know what your looking for / have the capital & reserves / find the right deal then go for it! In your position sounds like your job may expose you to potential partners with more experience. It may be advantageous to partner with someone who can guide you through your first deal.
Rental Property Investor · Jericho, VT · Member since 2021 · 28 posts · 19 votes
4y
Hey CJ sounds like your on the right track. In my opinion the first deal is pretty important and in my experience the hardest to acquire. After that first deal you learn the process and will naturally have more experience and become more comfortable. I spent a great deal of time educating myself and buying used books on eBay. I think these used books are really the best investment I ever made. I analyzed ALOT of deals to understand my market, and I made sure I had reasonable reserves. If you know what your looking for / have the capital & reserves / find the right deal then go for it! In your position sounds like your job may expose you to potential partners with more experience. It may be advantageous to partner with someone who can guide you through your first deal.
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
4y
Well said. Analyze real opportunities...that will take your reading and talking to the doing stage...and help you understand your target market and nail down your criteria...and then start making offers. At some point, your capital, knowledge, and confidence will converge into a purchase. Good luck...you're already on the way.
Realtor · Salt Lake City, UT · Member since 2021 · 25 posts · 49 votes
4y
Keep looking running the numbers. If you find a deal or a few run them by a trusted mentor who has a good bit of experience in REI. Then go for it if you get the green light. One bit of advice from my early experience is that there's no such thing as perfect in REI.
Hey CJ sounds like your on the right track. In my opinion the first deal is pretty important and in my experience the hardest to acquire. After that first deal you learn the process and will naturally have more experience and become more comfortable. I spent a great deal of time educating myself and buying used books on eBay. I think these used books are really the best investment I ever made. I analyzed ALOT of deals to understand my market, and I made sure I had reasonable reserves. If you know what your looking for / have the capital & reserves / find the right deal then go for it! In your position sounds like your job may expose you to potential partners with more experience. It may be advantageous to partner with someone who can guide you through your first deal.
Thank you for the quick response and much appriciated advice! what would be good for capitol and reserves?
Well said. Analyze real opportunities...that will take your reading and talking to the doing stage...and help you understand your target market and nail down your criteria...and then start making offers. At some point, your capital, knowledge, and confidence will converge into a purchase. Good luck...you're already on the way.
Thank you I appreciate that, how do you analyze deals? After you find a property that matches your niche or requirements what's the next step to analyze to find out whether its a good deal or bad deal? Do you use certain resources online to find this information aswell or do you inquire with the property owner...
Rental Property Investor · Jericho, VT · Member since 2021 · 28 posts · 19 votes
4y
Thank you for the quick response and much appriciated advice! what would be good for capitol and reserves?
I would say 6 months reserves of expenses is reasonable to start, I would also factor into your monthly expenses a monthly rent to put aside for capital expenditures (large price repairs roof, boiler, etc) if you intend to hold the asset for a long period of time it’s only reasonable to think you will at some point have to replace these things.
On my first property I set up a seperate bank account deposited my reserves and all rent would go into the account. Everything gets paid out of the account but I never paid myself. The money stays in the account and pays for all the expenses when they come up. Eventually that money will contribute or pay for your next building (likely combined with additional capital or proceeds of appreciation depending on how quickly you want to scale.
I know for me when I made the decision to invest in real estate I wanted to take immediate action, but for me that action came in the form of analyzing deals, and reading books, listening to podcasts etc. Don’t force yourself into a bad deal but force yourself to understand what a good deal is and then go after it.