Quote from @Aaron Duthie:
Hi Taylor - so cool posting a plan like this at 18. You're in a coveted position to accomplish anything you can envision.
Like you said, there are many different routes to take in real estate. Plenty of good advice, proven strategies, and sound wisdom out there, but ultimately it's up to you to align your approach with your own personal style.
Here's my take on your plan, given this will be your first time investing in RE:
1.) Absolutely house-hack (2-4 unit multifamily, or ADU's are trending now too). It will give you the foundational skills to pursue any other strategy in real estate. How to acquire property, how to add value through renovations, how to manage tenants, how to grow rental income, how to sell for profit. The best part is - you're actually living there, so all of your work will be self-inspired. You make it better because you want it to be better for yourself. You'll also have a lower risk of default/running out of money since you're likely financed through 30-year Fannie Mae/Freddie Mac. Starting out with a fix and flip using hard money will put you under the gun to move quickly, budget accurately, with less room for mistakes. Mistakes are good, since it's where you learn the most, so do everything you can to make the most room for potential mistakes.
2.) If you purchase the original property using FHA/Conventional, a Cash-out Refinance within the first year works if you've bought the property at a discount. Otherwise, there won't be any additional equity to pull from, unless the sub-market you're located in skyrockets on it's own. More than likely, you'll need to force appreciation through value-add renovations over time. But once you've built up equity, a HELOC or cash-out refi should serve you well to take on a fix n flip
3.) Majors - If your goal is to use a job to quickly feed your RE growth, then I'd recommend Finance, Engineering, and/or Business Admin. Find a career that you can get started in quickly, and double your W-2 income quickly. Doctors and Lawyers are big on the income potential, but they take alot more time/money to get established in.
Thank you so much for taking the time to answer Aaron, I really appreciate it. You’re out look and suggestions make me feel a lot better about what track to be on and securing my financial independence goals.
I did want to tell you a little more about myself so you would have a better understanding of what my more prominent traits are for real estate and which path you would suggest. I’m extremely hard working if it’s something I enjoy doing and aspire to get better at (such as this), I'm a very big people person, i like to talk and am good at making friends and interacting, i also have a more math type of brain. I have been financing my own money since I could drive, working to pay for gas etc. I play tennis on my high school team that was ranked #2 in the state for 5A and worked very hard to earn my spot and perform at that high of a level. I hope this gives a little bit of insight to who I am to help you better target these answers towards me personally.
I did want to ask a few more things:
What loan would you suggest getting on this first house hack (I do plan on renovating a little bit to gain equity) , which would be my primary place of living.
Also, what would you suggest doing after my first year of house hacking and what type of money method would you suggest to accomplish that next part of the plan (cash out refinance, hard money, etc.)?
Right now I’m reading How to Invest in Real Estate by Joshua Dorkin and Brandon Turner. It has provided me with so much good information and I can’t wait to continue to read. So far, I have found interest in House Hacking (which I plan to do first), House Flipping (which I may do after this original house hack), the classic BRRRR method, and finally Multi Families / Apartments once I have done enough deals and gained enough capital .
On that note, do you suggest any other books? I’ve compiled a list of a bunch that I am looking forward towards reading such as a few mindset books, a couple on tax benefits, negotiating, etc. and on how to do certain flips, rentals, house hacks.
Finally, will a finance degree benefit me at all in my real estate path?
I’d really like to continue down the entrepreneur path to become financially free on a more rigorous timeline. Not saying overnight but, I would like to buy and work towards that goal as much as possible instead of solely buying and holding.
Again thank you so much for taking the time to help out, this community is truly amazing. I can’t wait to start my journey.
