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Updated about 15 years ago on . Most recent reply
Hello from Fargo, need advice!
After being a long time lurker, I decided it was time to take the plunge and get the advice I need. I know it is a little long, but I would appreciate any input you could give me! :D
A little background:
I am 21 years old and will be graduating in one semester with a degree in Finance from North Dakota State University. I get great grades, but have always felt out of place in school and have had enough jobs working for other people to know that eventually, I want to work for myself.
My interest in real estate started when I was 18. My best friend purchased a run down house and I watched and helped him fix it up and in a few weeks time, turn a $15,000 profit. I was amazed that a few kids could make the same amount of money that it would have taken our peers years to make with their part time jobs.
Four years and tens of thousands of dollars later, I still found myself thinking of the flip we did a few years ago and how real estate investing was what I wanted to do with the rest of my life.
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Here is where I would appreciate some advice.
I would consider myself a little more knowledgeable than an absolute beginner, I have been a part of a flip, read a few real estate books (just finished Gary Kellers The Millionaire REI, which was one of the best beginner books I believe) and understand many things about finance and investing because of my Finance degree; however I understand that I have so much to learn.
I graduate in May (7 Months from now) and will be getting married to my high school sweetheart in August. We will be moving to the west coast from North Dakota in a year and a half for her to go to medical school.
I want to invest in at least one property before we move in 18 months but I don't know which is the correct way to go about it.
My idea is to pick up a small rental property, rent it out until my wife and I move and then fix it up a bit and sell it for hopefully a profit. (Fargo's real estate market has not suffered nearly as bad as a majority of the countries)
If you were in my shoes, 18 months until you move and wanting to get at least one property under your belt, how would you go about it?
A little more random facts that may help you understand me and help you give me some advice.
-My fiance 100% stands behind my decision and understands the risks involved.
-I currently have ~$12,000 in liquid capital, but do have a wedding this summer so there will be random expenses will come up (majority of the wedding is being paid for graciously by our parents)
-I do NOT have the full support of my parents, both of mine are successful, blue collar, 50 hour a week working people. I have been very fortunate to have the support of them in almost everything I have done in the past, however they would rather see me graduate and become just like them, working in corporate America, and that is not what I want.
Thank you so much
Most Popular Reply
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My advice is do nothing. For now.
I certainly would not try to buy a property, fix it, rent it, fix it again and sell it all in the space of 18 months. You graduate in seven months. You're getting married shortly after that. You've moving to the "west coast" (where? huge difference between Eureka CA and SF CA, for example) at the end of 18 months. What, you don't think you have enough stress coming up over the next year and a half?
Now, if you're really determined to do something, do a fix and flip. There's just no way it makes sense to try to fix, rent, re-fix and sell in 18 months. Most leases are a year, with an understanding it can be renewed. You're going to be lucky to get a year in, and probably have to be up front its only a year. Just do a fix and flip.
Really, though, that $12K will be money you need to get through all these life changes. I'd wait until you're in a more stable position to put it at risk. Maybe you parley it into $20-30K with a fix and flip. Maybe you end up losing it.