New member, seeking pointers/ advice

[Vincent Dicristo]

Hi, I recently turned 18 years old, live in NJ and I'm looking to become a full time real estate investor. I'll tell you guys a little about myself and my current financial situation. I found out about real estate investing from my step dad who has flipped two houses himself. He owns both a construction & painting company, so he's great with being able to renovate places and doesn't need a contractor for anything so he'd be willing to help me if flipping houses is the route I choose to go. My father passed away coming up on two years ago in August from a car accident, where a highly intoxicated driver hit him from behind going approximately 90 mph. Why is this relevant to this topic? It's because he was overserved alcohol by Carrabbas and there's a lawsuit and I can personally be getting anywhere from a $500,000-$1,000,000 settlement.(that's after the lawyer fees) The settlement date is in September and I'm looking gain as much knowledge as possible beforehand about real estate investing. So I have a few questions I'd like to ask if anyone would be willing to help me. What route should I go based on the current amount of money I will be receiving? Should I buy a house out right and rent it out for a sizeable cash flow? Should I also flip another house at the same time as doing that? Should I start whole saling instead? I'd really appreciate anyone who could tell me what they'd do in my current situation. Also what are some great books I could read to gain some knowledge on real estate investing? Thanks in advance! (by the way my name is Vincent and I'm looking forward to becoming an active member on this website!)

[Jon Holdman]

First, you should ABSOLUTELY NOT be talking about getting a big wad of money publicly like this!  You will have all sorts of offers to help you "invest" that money.  Let me know if you want and I'll edit that detail out of your posts.  Though, by now its been indexed by search engines and will never truly go away.

Second, rentals don't usually produce "sizable cash flow". Getting a 10% return on the money you've invested is pretty good.   In most places that's not achievable.  In some you can do somewhat better.  So that should give you an idea of the returns you would get if you invested the entire lump.

There are lots of sellers who will try to convince you "cash flow = rent - PITI". That's boloney. You have a LOT more expenses than that.

Give some serious consideration to using some of that money to get a college education in a field that has good job prospects.  Engineering and technical fields.  Not English or History.  Nothing wrong with English, History or many other majors.  But those degrees don't result in good paychecks.  However, these days there is a lot of "job inflation" going on.  Jobs that you could once get with just a high school diploma now require college degrees.  Its not that the job truly requires a degree, but rather that there are many candidates that have degrees, so employers don't bother hiring people without them.  With nothing but a high school diploma you limit your job prospects significantly.

That may seem like a lot of money that you could live off of the rest of your life, if you just invest it correctly.  Its not.  That money will slip through you fingers like sand.  I have a friend who's daughter won the lottery some years ago.  The money is gone and they are going back to work late in life.  You can easily end up in the same position.  Use that money to develop yourself, such as getting the right degree, and you will be able to earn in the future.