Hunter,
Looks like I'm a little late to the party on this one, but what's 25-days in the whole grand stratagem? I just took a short while to write a post in response to another guy here on BP, who also happened to be 17. He was asking similar questions to what you're asking now. Instead of dancing around and likely repeating myself several times, I'm going to copy/paste that response here then cap it off with a little bit more specificity to your individual interests. Just to provide some background, he was wanting to know how and where to begin, and is looking at potentially doing clerical work for a local agency in his town to learn what he can from what will hopefully be a mentor-like figure.
"Not the worst idea if you're a complete novice and brand-new to the game. Though, you should know, I don't imagine you'll learn much from working at an agency as a pencil-pusher apart from picking up on real estate lingo and grasping acronyms that are commonly used, among other negligible stuff like that. There's a starting point for everyone, though, and this could be yours. Whatever it takes to get your foot through the door. But in order to familiarize yourself with different investment strategies, and there are a lot of them, you'll need to study. Then when you're done studying, study some more. In the midst of your studying, take a small study break, then continue your studies once again. This is the only real way you're ever going to obtain the knowledge necessary to take action and ultimately taste success in this business. Trust me, you don't want "experience" without first procuring the proper knowledge, seeing as that experience will likely be a bad one. You'll inevitably have poor encounters whether you study first, or not; but being aware of what recourse you need to take when it happens will soften the blow significantly.
I started investing in real estate when I was 17, too, and have since both flipped houses and become an active landlord. You wanna know what sparked my interest? A late-night infomercial. There it was, somewhere around 3-5 AM, I'm the only person awake in the house, and I'm sitting there playing video games on my computer when I hear small pieces of it coming from the television on the other side of the room. All this talk about big paydays with no-money-down got my attention pretty effortlessly. The guy's name is *************, and while he admittedly may look like and come across as your typical scam artist or "guru," he isn't. I've read every single one of his books (several of which were free) and nothing he says is untrue or unachievable. Not by any means. Nor does he sugarcoat it by saying it'll be easy or without real work. Heck, he doesn't even shoot for the get-rich-quick scheme that so many others shove down the throats of desperate newcomers. His main focus is on wholesaling, which I imagine you've probably heard of by now. It's a strategy I implemented for a while but grew to loathe. Don't get me wrong, though. I absolutely love having wholesalers work for me, and I currently have no less than a dozen of them who send me properties every single day. It just wasn't a strategy I personally enjoyed, as I don't favor relying on others in order for me to construct a deal and get paid. This is why I've focused on flipping and renting, both of which I absolutely love and plan to continually expand upon for years and years to come. And while I may not credit my successes to his teachings, despite him having certainly taught me a lot, I also can't say I'd be where I am now if it hadn't been for that cheesy television ad that influenced me to ask my dad for his credit-card the following morning in order to purchase his book and begin a lasting journey that I, at the time, didn't even know I was on.
As for your question, I made it pretty clear above that I don't think a clerical job will serve you well if it is a mentorship you seek. Your best bet, if you desire a real person out in front of you that you can shake hands with and pose questions to, would be to attend a meeting at any of your local real estate investment associations (or REIAs). You'll find people there from all walks of the game; be it an agent, a broker, a contractor, a lender, an attorney, or any other practicing real-estate professional. Here you can either do the whole meet-and-greet, or simply sit back and take notes while learning different strategies. I would suggest, though, that once you've managed to pinpoint what you want to focus on, that you get to know everyone you can. Give them a business card of yours and explain what you could do for them, or what they could do for you. You'll learn a lot here, and there are plenty of people walking around willing to openly offer advice. If you're shy, you could always stick to asking your questions and learning new things on BiggerPockets, but on the same token, if you're too shy to speak to people face-to-face, you should consider investment strategies that exist outside the realm of real estate.
Best of luck to you in whatever you do, and I'm glad to answer any questions you may have.
Sic parvis magna. Labor omnia vincit."
Then I had to place a second comment because BP is silly like that.
"The name I included that turned into a garbled line of asterisks is D34N GR4Z1051. Hope you can read that, lol. If not, take a minute and touch up on your "1337 speak" via Google. Not sure why BP would block his name. Stupid."
Now in order to target your post more precisely, Hunter, I want to firstly expand upon the comment Caleb made above. While it is true that $100 per/door is a relatively widespread rule-of-thumb that investors tend to follow when obtaining rental properties, it is by NO means a limitation. "The glass ceiling? The brass ring? Break it. Take it." Your deal is as good as you make it. Do the right research, put in the right time, find the right property, and structure it the right way and you'll be leagues ahead of your colleagues or competition, depending on how you view them. I don't usually reveal numerical or monetary information about my deals in a public setting, but I'm going to make the exception here. I'm buying a property within the next few weeks via owner-finance with 27% down on an 8-year balloon. Seller pays any/all applicable closing costs. My down-payment will satisfy the remaining balance on their current mortgage, which is necessary in this specific case because the bank won't let the owner provide financing without triggering the due-on-sale clause of their agreement. Trust me, we checked. I'm purchasing this property all-in for $30,000 and it rents for $1,100/mo, of which a new 1-year lease has just been signed. My interest rate will be at 5% and the loan will be amortized over 30-years. So let's talk about cash flow, broken down on a monthly scale:
- $1,100.00 rent
- $66.66 insurance
- $121.00 property management (11%)
- $91.66 vacancy (8.33% or 1-month)
- $117.56 mortgage (principal & interest)
- $44.75 property taxes
- $55.00 maintenance/repairs (5%)
- $55.00 capital expenditures (5%)
- $548.37 cash flow
If I remember right, this puts the capitalization rate at about 30% and the annual ROI at about 120%. Perhaps a little less. These are my "safe" and honestly unrealistic numbers. If we're talking what's real, I'm not going to be using property management for this property. That's $121.00 more a month. For at least the next year, vacancy isn't going to be an issue (and if you're factoring in tenant turnover costs assuming they bail, their security deposit is 2-months worth of rent, or $2,200, so if they broke their lease and lost their deposit, that would inherently be a significant boost to my cash flow - this property has a track-record of taking about 1-week to fill when vacant, and I've familiarized myself with all of the current landlord's marketing methods and materials to keep it that way - but for the sake of this, we're going to pretend they stay). That's $91.66 more a month. This property is in excellent physical condition, which is part of the reason why it's demanding such a high rent. Ergo, I don't anticipate 5% worth of maintenance/repairs anytime soon. That's $55.00 more a month. As for the CapEx, the owner had a new roof put on 2-years ago, and the driveway was repaved 5-years ago. Electrical and plumbing systems are pristine and up to code. That's $55.00 more a month. Now we're left with an actual, real-world number of $871.03 per/mo in cash flow after the mortgage, taxes, and insurance. I have no idea how sky-high this makes the cap rate and ROI. For just $8,100 down, I hope you can see the potential of what finding the right deals can do for you.
Let me clarify, also, that this is in NO way meant to sound boastful, but to instead get you excited and help you lose the shackles of the status quo. Realize the opportunities that are floating around out there, likely right under your nose, waiting to be exploited by whoever wants them badly enough. Look at those numbers and brainstorm. Add or take away as you feel would be more accurate for your area, abilities, and available time. And if you're morally worried about deals that are "too good," believing there's a high likelihood that if they're like this then you're probably taking advantage of someone in a poverty-stricken or necessitous situation, then you need to readjust your mental approach. First off, this is business. Nothing is personal. If you want to save the world, donate all the time you'd like elsewhere. But the time you dedicate to working is the same time you're acquiring the means to put food on YOUR family's table, so that THEY don't end up living a poor standard of life due to financial hardship (and it happens to billions, every single day). In the situation surrounding this particular house, however, there's no widow in despair. There's no sorrowful parent of a sick child. There's no mourning heir to a property they never even wanted. No, it's actually a wealthy investor who is liquidating his assets because he's building (you guessed it) more rentals. They've already started the project, actually, and it's coming along quite well. Luckily for me it's just far enough away not to steal any of the tenants I'll be advertising to in the future, lol.
So maintain your motivation, stay the course, and achieve your dreams. Make success your reality.
Good luck out there!