It Finally Clicked

**armenh** · 08-24-2008 06:25 PM

Yesterday, I was reading a post from YE about real estate, and it finally made sense to me. I am currently 16 will be 17 in March. I have some funds in a custodial account, I won't share how much though. I have set a goal for myself by the time I am 18 I want to have 40k in that fund. I am into stocks, I do trade and follow the stock market daily, I am also into the telecom industry. I have promised myself to raise that much money with a mix of things stocks and selling telecom products. As my dad is in the Telecom Industry I have access to many products which I can sell and make a profit off of. Any sort of revenue or profit I make in the next 1 and a half years will be entering my custodial account. As we are in this real estate crunch and things willbe getting much worse to my delight

I have planned that once 18 I will buy my first property. I will put the 40k as a down payment and buy some sort of real estate. This 1 in a half years, is time for me to learn about real estate, I am interested in commercial mostly. I would like to read on real estate any good books you might know of? Also once 18 the market should be at its lowest and things should be starting to turn around right after that. Opinions? Tips? Comments LET THEM ROLE...
Thanks

**AllBallz.Net** · 08-24-2008 08:12 PM

First off, I have to say your goal of 40K in 2 years is quite lofty. That shouldn't stop you though; go for it and good luck. The real estate industry is not guaranteed to get worse. There are no guarantees in real estate; it depends on far too many variables to list here.

If you think buying your first property at 18 is a good path for you, go for it. However, I have a few questions and a few tips. The first being you need to do start following the market in your area and in the specific type of properties you are looking at. Then you can look at the whether or not the property you are interested in is a good deal or not. The 40K would just be a down payment; how would you pay the monthly mortgage payments? I'm assuming you'd be in college by that time. So balancing work to pay the mortgage, school to further your education, and any duties associated with the property could be tricky.

As for books on the subject, start with some basics: Real Estate Investing for Dummies and then once you finish that go on to Property Management for Dummies since you need to know how to handle your buildings once they are yours.

**armenh** · 08-24-2008 08:26 PM

Originally Posted by AllBallz.Net

First off, I have to say your goal of 40K in 2 years is quite lofty. That shouldn't stop you though; go for it and good luck. The real estate industry is not guaranteed to get worse. There are no guarantees in real estate; it depends on far too many variables to list here.

If you think buying your first property at 18 is a good path for you, go for it. However, I have a few questions and a few tips. The first being you need to do start following the market in your area and in the specific type of properties you are looking at. Then you can look at the whether or not the property you are interested in is a good deal or not. The 40K would just be a down payment; how would you pay the monthly mortgage payments? I'm assuming you'd be in college by that time. So balancing work to pay the mortgage, school to further your education, and any duties associated with the property could be tricky.

As for books on the subject, start with some basics: Real Estate Investing for Dummies and then once you finish that go on to Property Management for Dummies since you need to know how to handle your buildings once they are yours.

I already have some cash in the account, but making some extra bucks for me isnt too hard because of my dad's business and selling his product for him once in a while. I think 40k is actually quite reachable. Yes it would be a down payment and the monthly payments you are referring to should be covered with the money the property or business or w.e is it I might buy is bringing in, no?

**goelephant** · 08-24-2008 08:45 PM

Originally Posted by armenh

I already have some cash in the account, but making some extra bucks for me isnt too hard because of my dad's business and selling his product for him once in a while. I think 40k is actually quite reachable. Yes it would be a down payment and the monthly payments you are referring to should be covered with the money the property or business or w.e is it I might buy is bringing in, no?

That's fine, but what if you don't find a tenant for 6 months? Are you going to manage the property, or are you going to contract that out to someone? How about money to fix the roof when it leaks, or the water heater when it burns out?

He was just saying that there is a lot more involved than just purchasing the property. When I bought my house 3 years ago, I wasn't fully prepared for all of the little things (and big things) that pop up just with day-to-day use.

I think you should definitely try to do this, but really make sure you are covered. I was 20 when I bought my house, so it's certainly doable.

**armenh** · 08-27-2008 12:54 AM

bump.......

**AllBallz.Net** · 08-27-2008 10:38 AM

armenh, your rent income won't always cover expenses; especially in the beginning. That's why you really need to look at the numbers before you buy anything to make sure it works.

I'm not trying to discourage you. It just seems like you are making it a lot easier than it will be in reality.

**MoneyMagnet** · 08-27-2008 11:06 AM

Definitely get a mentor, read books, etc. Start going to REI clubs and network. There are a ton of ways to make money in real estate. Although I am going to be flipping houses, I also know about a ton of other ways to make money. I just wrote in my blog about doing a Lease Options, and I'm going to be writing about other ways to make money.

If you want to be a landlord, the standard calculation for expenses is 50% of rent. So if you have a house renting for $500, expect that you're going to have an average monthly expense of $250. This includes times when a tenant moves out, you need new carpet, your house is vacant for X number of days, something breaks, property management fees, property taxes, etc. The 50% figure can sway depending on if you manage it yourself (I suggest you do), the age of the house, the quality of tenants that you put into your property, and other factors. One thing that isn't included in the 50% rule is the Mortgage. If you want, PM me and I will send you an Excel Spreadsheet that I have for number crunching rental properties.

Although you can make awesome bank, go into it with all your effort and calculate all your numbers extremely conservatively. Do your research. If you find a house where monthly rent is 2% of the purchase price, your chances of success are extremely high. I really think only a retard can fail if he was handed a property that was raking in 2% of what he paid for it. A very good way to find a house that can pull in 2% of the sale price (or sale price + rehab costs), find a house that needs fixing & you can negotiate a better deal. I suggest you look in the Palmdale, Adelanto, and the areas surrounding those cities since you live in LA.

Originally Posted by AllBallz.Net

armenh, your rent income won't always cover expenses; especially in the beginning. That's why you really need to look at the numbers before you buy anything to make sure it works.

I'm not trying to discourage you. It just seems like you are making it a lot easier than it will be in reality.

I actually think everything in life is easy, but some things might take more effort and hard work than others.

**Joshua Jones** · 08-27-2008 11:17 AM

Armenh, I know you can do anything you set your heart and mind on.

I would make a couple of recommendations:
Don't buy 1 house.. buy 4.
Use partners to get the good rates for your mortgages (possibly dad).
Have them rented before you go to closing.
------------------------------------------------
On a side note... Anthony - I just saw your jump video on your blog.. that was awesome man!

**Scott Bradley** · 09-01-2008 07:22 AM

Originally Posted by armenh

Yesterday, I was reading a post from YE about real estate, and it finally made sense to me. I am currently 16 will be 17 in March. I have some funds in a custodial account, I won't share how much though. I have set a goal for myself by the time I am 18 I want to have 40k in that fund. I am into stocks, I do trade and follow the stock market daily, I am also into the telecom industry. I have promised myself to raise that much money with a mix of things stocks and selling telecom products. As my dad is in the Telecom Industry I have access to many products which I can sell and make a profit off of. Any sort of revenue or profit I make in the next 1 and a half years will be entering my custodial account. As we are in this real estate crunch and things willbe getting much worse to my delight

I have planned that once 18 I will buy my first property. I will put the 40k as a down payment and buy some sort of real estate. This 1 in a half years, is time for me to learn about real estate, I am interested in commercial mostly. I would like to read on real estate any good books you might know of? Also once 18 the market should be at its lowest and things should be starting to turn around right after that. Opinions? Tips? Comments LET THEM ROLE...
Thanks

Before you invest in RE I would suggest that you find a mentor that can help you learn what you need to learn...and secondly don't invest in RE until you have read Rich Dad Poor Dad by Robert Kiyosaki! That book changed my life!

**armenh** · 09-01-2008 11:46 PM

Originally Posted by Scott Bradley

Before you invest in RE I would suggest that you find a mentor that can help you learn what you need to learn...and secondly don't invest in RE until you have read Rich Dad Poor Dad by Robert Kiyosaki! That book changed my life!

I have read Rich Dad Poor Dad, what part of it do you seem to find it linked to real estate? All I see is that the book is more of a finance book than a Real Estate one...

**Aletheides** · 09-02-2008 12:56 AM

If you want to get started in RE I suggest the first property you buy be at least a duplex, ideally a triplex or quad.

If you live in one of the units it will be easier to finance because it will be owner occupied.

Secondly it will be even more easier to invest because you will have income coming in from the other units.

Right now I am reading this book: Amazon.com: Investing in Duplexes, Triplexes, and Quads: The Fastest and Safest Way to Real Estate Wealth: Larry B. Loftis: Books

It's pretty awesome, written by a lawyer/RE investor (pretty successful guy). He also recommends a few of his favorite RE books in the beginning too. Check it out - can't beat the price.

Buying investment properties is more difficult (especially now) - and buying a single family home you're not going to live in qualifies as investment property. A minimum of 20% down payment and if the house is vacant you're going to have to cover the mortgage all by yourself. With multiunits if one unit becomes vacant hopefully you'll have the others rented during that time so it's not too much sweat off your back.

Hope this post helps a little.

**Scott Bradley** · 09-02-2008 05:24 AM

Originally Posted by armenh

I have read Rich Dad Poor Dad, what part of it do you seem to find it linked to real estate? All I see is that the book is more of a finance book than a Real Estate one...

Awesome that is great!

Now I would recommend that you find a mentor that has been there and done that to help you and you will be well on your way!