25 year old in Phoenix just getting started

[Edward Carlin]

Hi everyone,

I'm originally from Austin, TX (where real estate is exploding right now), but I've been in Phoenix for the past year and a half. Now that I've just started a new job here, I figure I'll be in the Valley of the Sun for at least a couple of years, and since I feel like I know the neighborhoods of the East Valley pretty well now, I'm interested in dipping my toe in the real estate waters.

Every bit of advice I've ever read for 20-somethings strongly recommends saving and investing money to make use of the time I have on my side. I'm very fortunate not to have any debt, but even though I'm good about saving money, it's not doing much good just sitting in my checking account, so I'd like to neutralize my living costs and start some cashflow.

I'm primarily interested in multi-unit properties I could live in and rent out to offset the mortgage, though I'm a bit wary of becoming a landlord. I've read several articles on BiggerPockets already, and I recently attended a workshop at a local real estate office, so I think my next step is to get in touch with an agent in my area and get pre-approved by my bank so if I come across a good deal, I'll be more ready to seize it.

If anyone has some indispensable tips for a complete neophyte just getting started, I'd appreciate it!

-Ed

[James Paine]

@Edward Carlin

I started in RE when I was 18.  I'm 29 now and have done thousands of deals.   

Personally if you are willing to hustle I'd look into buying a 4 unit property at the maximum allowable price that an FHA loan will qualify for in your area. What I would do is to rent out 2-3 of the units on a month to month basis. I'd live in one of the unrented units and work weekends and nights upgrading it, make it nice. I'd do this 1 unit at a time. The reason I'd have the extra vacant unit is I would rent it on AirBnb as well as VRBO. This will give you a good comparison of where you make more money and where you should spend your time. AirBnB or longterm tenants. Once you have really fixed up each unit (raising rents and probably getting new tenants in each) you could probably sell the property at the new cap rate with the upgrades and make some money after 2 years. That would give you some tax free income to do it again. The second time I'd buy a primary residence and do the above again and use the profit from the first deal to buy a 3rd investment property.

Best of luck!

James