Some general questions..!!?

Question

1)At what age did you make your first investment?I am still 20 majoring computer science from a university in arkansas,i will graduate in about 2 years and then 2 more years for masters.Should i start investing now or after i am done with my masters?i know i still have to learn alot about real estate but do you guys think 20 is the correct age to start investing.
2)How do check the vacany rate of a area?i am particulary interested in investing in edison,nj.(i live in arkansas but i can move there). 
3)How long do good investors usually search before they decide to invest in a property?I mean like for 1 week-2 weeks?

James Vermillion · Answer

1) Do you guys think 20 is the correct age to start investing.

There is definitely no correct age to start investing, just look at the BP membership.  Some people start as teenagers and are wildly successful while others start at 70 and fail miserably, and the same could be said for the opposite.  There are many factors that are much more important than age in determining if someone is ready to start investing in real estate such as knowledge of the local market conditions, personal financial situation, having a plan in place and the knowledge needed to execute, and the skills needed to succeed in the area of real estate investing one is looking to become involved in.  I would not get caught up on a specific age, but focus on becoming ready to start making educated investment decisions.

2)How do check the vacany rate of a area?i am particulary interested in investing in edison,nj.(i live in arkansas but i can move there).

Check out the BP blog and forums, as there are a lot of ideas out there about determining these things.  Here is a blog post from Jeff Brown to get you started http://www.biggerpockets.com/renewsblog/2011/03/01/find-fair-market-rents-vacancy/

3)How long do good investors usually search before they decide to invest in a property?I mean like for 1 week-2 weeks?

This really depends on a lot of things as well.  Some investors are much better at quickly identifying and analyzing a deal, and can do so much faster than others.  This also depends on the market...some markets have more deals to be had than others at a certain point in time.  In addition, people use different methods to find their investment properties.  Some people  launch marketing campaigns (yellow letters, postcards, etc), some primarily use the MLS and others have people finding properties for them.  There have been times where I looked for weeks and did not find a property I was even remotely interested while other times I found a property I ended up buying on the first day of really looking, so luck and timing also play big parts.

I hope that helps at least a little, and there are not dumb questions here on BP.  Make sure you fully utilize the site features to help you find answers (the search function has recently been revamped and can help you find reading material on most any real estate subject you are looking for). Also, please consider posting a picture, it really helps others and will increase the interaction from other members.  Good luck to you!

Glenn Espinosa · Answer

I agree that you need to read a little bit more regarding cash flow formulas, rental property investing, and real estate in general. The search function here on BP is very useful.

Once you've exhausted all the articles and posts then we can help you more since your questions will become more specific.

I agree that there is no age too young to invest in real estate. If you have the knowledge and the means then you shouldn't let opportunities slip by.

I made my first real estate investment at 22 years old. I still wish I would have started earlier.

If anything make sure you stay active on biggerpockets and engage the community.

Ed O. · Answer

You found the best site on the web and that's a great start. If you're wanting to be a buy and hold landlord, I'd recommend reading Michael Zuber's blog. He's got a ton of great info and strategies he uses that he shares. 
I would totally caution you about buying with the intention of residing in a specific area down the road. No one knows how the road will turn as you get older. To buy so far out away in NJ with the idea of moving there down the road is a risky approach in my opinion. You never know where the work will be when you get done with school or if there will be another driving factor in where you reside. Best of luck and read on up!

Luis Castillo · Answer

Vaishal, if you are in school then you know there are no dumb questions. I can tell that you have not done enough homework on investment properties. Study up a little on multi family investments. Familiarize yourself with net operating income, expenses, financing, 2 percent rule, 50 percent rule, cap rates, cash on cash returns, DCSR, capx and property management to name just a few things. When you know how to arrive at the value of an income property and the true net income it will leave then take the plunge.

Age does not matter. I started in real estate at the age of 18 and purchased my first property a year later. I wish more young people what start investing in real estate but it's hard to convince them.

Finish your education and continue learning more about income property. I don't mean to sound negative about your RE knowledge, I just want you to have your eyes open before you make a move.

Good luck!! There is a lot of information on this site but if you have any other questions feel free to call me.

Callum K. · Answer

Vaishal, If I could go back and start over, I would have jumped in at your age if I could.  There was a post on here not too long ago about a 15 year old girl who bought her second rental property (of course she had her mom co-sign and help out) and she is gaining the same experience that we all gain in our first few years of REI.  My suggestion is to start looking around and networking.  If you can find a deal you think is good, pull the trigger.

Rental rates depend on a lot of things.  First and foremost, what type of rentals are you looking for?  300k for multi-housing? 300k for a SFR?  Many people apply a 2% rule however that rule would only work for lower income properties as far as I know.  If I tried to rent a 300k home for $6,000 per month, I would be laughed out of the room.  the area you invest in also varies.  If you are looking in Arkansas, then its pretty close to my area in Tulsa so for me, most rates for a SFR property at around 300k would be 1.0%-1.5% of the home price ($3000-$4500).  Over the past 6 months, I have found people asking for as low as 0.8% of the sale price.  My favorite way to find rental rates is to hop on craigslist and look around at the different properties.

With respect to searching for properties, I have gone days, weeks or months before pulling a trigger.  You first have to figure out what you are wanting and keep your eyes peeled.  Talk to people in the industry, keep an eye out for properties, etc

Vaishal Patel · Answer

One more thing..How much should the rent be compared to the price of the property..Lets say a property is worth 300k...How much the rent should be for that property?Around 1500-1600$ is a good deal?

Vaishal Patel · Answer

p.s- some of the questions might be too dumb for you, i m just 20 and know very little about real estate...so..:)..lol