All Forum Posts by: Account Closed

Hi, everyone! I want to give everyone a recap about how I got to where I am today as a 20 year old real estate investor in the Kansas City market with over 10 deals under my belt. 

I started my journey off as most people do, working a demanding job and wondering how I can make enough money to quit said job and become self dependent. I come from a middle class family with no one involved in real estate, but my dad always told me that real estate is where wealth is made, so I always had it in the back of my mind. At the age of 16-17, I began obsessively listening to BP podcasts, reading forums, reading books, and reaching out to local investors offering myself as willing to do anything I could to provide value to them in exchange for experience. After a few weeks, I finally got in contact with two partnered investors who needed someone like myself. They were beginning a wholesaling operation and wanted someone to do the grunt work of finding leads, which I was more than willing to do. I happened to already know a lot about wholesaling and I immediately got to work, securing 4 good leads within a few months. I was beyond excited that I could be getting my first deal done so soon. But, they all fell through, for multiple reasons. During that time, the investors I was working with decided to quit working together, and ended up dissolving the operation. I was extremely disappointed, and it honestly caused me to take a break from real estate, just shortly after starting. 

Fast forwarding to when I turned 19, I decided that I needed to take matters into my own hands and get serious about real estate. I couldn't quit after my short attempt, as I knew the reward would be greater than the risk. I knew college wasn't the right path for me, so I was working full time as a mechanic, saving every dollar I could in order to put it into real estate. This is when I noticed that the local market was exploding and local real estate companies were having a hard time keeping up. I didn't know what I wanted to do yet, but I began reaching out to local investors again, and stumbled across a local company that I knew was one of the biggest flippers in the area. I thought I had no chance of working with them, so I contacted them asking if they knew of anyone that may need help. It turns out they were looking for a new person to add to their acquisition team, but I was really underqualified (they wanted someone with a bachelors degree, 2 years experience in real estate, and a real estate license). I explained to them who I was, what I could provide them, and how much I aligned with their company values. I had 2 interviews and was offered the position within a week. I was completely shocked, yet I was so excited to get started. I began working with them right after I turned 20, and within my first week, I secured 4 great deals for the company (weekly quota was 1-2). No training with the company, no vast experience, I just worked as hard as I could to prove myself using my self taught knowledge. I was stoked. I continued getting deals and now have over 10 deals closed within the last 2.5 months of working with them. Things/deals started slowing down (due to the company's request), and I pushed through it, knowing it would pick back up. Then the company got even stricter with our buyer's criteria, and pushed our closing dates really far back (over 2 months until we could close on a potential property) and I knew that this wasn't sustainable. Last week, the company all of a sudden decided to shut down because their construction team couldn't keep up with acquisitions, and I am no longer with them. I went from a dead stop, to full speed ahead and killing it, to slamming into a wall and losing all momentum in real estate within 3 months. 

I am more than grateful to have this opportunity, and I proved to myself that I could succeed in real estate. I was not expecting this sudden stop, and now I'm not sure where to turn. I made this post for two reasons: to prove that anyone can make it in real estate, and to ask for guidance on what to do next. What would be the quickest way to become self dependent on real estate? Flipping? Owning rentals? Wholesaling? I have $20-$30k to use as needed. I also need to eventually purchase a MFH to house-hack; would it be best for me to do this first, then refinance and use the capitol to invest in a flip? I REALLY want to own and operate my own real estate business, I'm just not sure how to grow my current knowledge, skills, and experience into something.

Hey Elena!

Have you looked into a FHA loan for first time home buyers? It allows you to put as little as 3.5% down. However, you will have higher total mortgage insurance costs. Borrowers using a FHA loan will pay a monthly FHA mortgage insurance premium (MIP) and upfront mortgage insurance premium (UFMIP) of 1.75% on every FHA loan, regardless of the down payment. You can also cancel PMI once you build 20% equity in your home or choose to refinance under a different loan.

Here's a question for everyone that is more direct that will help me decide what strategy to go with:

Since I'm a mechanic and I do as much side work as possible, I was looking into getting a small commercial building that I could use as a small shop to work on customer's cars, flip cars, etc. Should this be my first investment property, or would it be smarter to invest in a residential home first?
I could get a bigger commercial building than what I need (~2000sqft), and rent out part of it to another small business/friend, and use the rest for my business. Most of the money would be saved for real estate, and the rest would be reinvested into the car business.

Finding the right building would be difficult, but not impossible. I'd look for a value-add property that needs a bit of work/clean up (easier to afford at first, and then I build in equity with my construction skills when cleaning it up etc).

Or just continue doing  side work at people's houses, and just look for the right residential property?

 Hey Peter! Thanks for your reply!

Right! 20k is a crazy number to be at, and I'm more than grateful, but it's definitely not where I want to be forever haha! 

I would love to acquire a mentor at some point. I've heard lots of great things about having someone to lean on when you're new to real estate. But as you said, I can't force that to happen quickly, so might as well keep saving and checking my options in the meantime. I haven't looked into a 401k just yet, i'll check that out soon!

I totally agree about the parent situation. They're just looking out for me, but I know that in order to make it big it takes some risk, but there are ways to minimize that, and that's what I'll have to show them. Good luck with everything Peter, thanks again for commenting! Hope you can inform your parents so they aren't too worried for you!

That's how I view it as well! As much as I respect their opinion, without having done it themselves or having much knowledge about real estate, I feel as if someone who has experience in real estate can give a better sense of guidance. I completely agree!

That is a great question! The first thing that comes to my mind is that I don't want to make the wrong choice. I tend to be a very big overthinker in general, and it makes situations like this much worse. I don't want to make the wrong choice, but I know that not everything can be 100%. 

I know that in terms of real estate and entrepreneurialism, my long term goal is that I want to own multiple income producing properties (SFH, MFH, Commercial, Businesses), and even flip them along the way. I also want to own a performance car shop as that is one of my father and I's passions. My dad has always been a jack of all trades. He taught me to learn one thing at a time, master it, and move onto the next. He taught me about cars, construction, welding, fabrication, etc. I want to be the same way, but with real estate.

I don't mean to bore you to death, but I don't have many people to talk to about this kind of thing lol. So, I guess my struggle is that I don't know where to start. I know I need more money than I have to begin doing anything, so I am continuously working my full time job as well as trying to figure out what side business I should start, just so I can start saving more towards real estate. As you can see, it's all a big downhill snowball effect for me.

Work full time job ----> figure out my own side business/hustle ---->  continue working my butt off ----> save money ---->  find a strategy ----> start pursuing strategy ----> ----> work butt off ----> find a way to systematize and automate?

Exactly! My only hesitation with going this direction ASAP is the fact that my parents think it's best for me to stay home for the next few years and save my money, instead of doing the FHA and living there for a year.

 Hey Andrew, thanks for your awesome advice! 

I really like your idea of the FHA rehab loan sooner than later, but the only drawback is that I'm technically required to live in that property for a year, right? I'm all for doing a multi-family with a bit of rehab to get me started. In my eyes it'd be the perfect start for me if done correctly and would even allow banks to borrow against that property in order to get more properties, all while teaching me the ins and outs of how owning rental property works. The sooner I do it, the more stabile I will be in my mid 20s compared to if I waited until I'm 24, but I've heard lots of conflicting advice on which one is better.

 Hey Antonio, thank you very much for your response! 

I totally agree with you that I am a little confused on where I should start and focus my time. I've drawn out multiple lists about which strategy would better fit my end goals, and I still haven't come to a conclusion just yet. However, once I do find that one strategy that best fits my goals, I'll definitely do as you suggested and stick to that! 

Sweet, sounds like Michael is doing very good for himself! I'll reach out and connect with him in a bit, it'd be very nice having contacts in the area with similar goals! Thanks for referring him!

 Thank you for your input and experience, I really appreciate you taking the time to comment!

That's awesome! That's realistically what I've always wanted to do, but I can't help but feel as if I am wasting so much time in between now and when I'm 23-24. However, like you said, it is a great and proven strategy and is one of the best ways to get into REI at a younger age. In the meantime, I will definitely keep saving, and if something were to pop up at the right price, I'd try to act on it.

No problem on the car flipping lol! I'm not too much of a genius on it myself, I just know how to fix them. I love the idea of using that knowledge in a way to make money to use towards real estate, but I just need to figure out the best way to capitalize on it. I've thought about a small piece of land with a shop on it that I could use to repair/flip projects, but not certain the cars could cover the overhead. Then I began thinking I should get a slightly bigger area than what I need, and rent out a portion of it to help cover the cost. Who knows. As you may be able to tell, I have a bit of trouble when it comes down to narrowing what I should focus on, but hopefully I can make that work out in my favor lol.

Anyways, thank you again for reaching out. I will for sure be in touch! I see it says you are from the area, let me know if you ever plan on heading to any REI meetings around here and maybe we could meet up!