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I just turned 25 years old, and recently (last two months) I've had an awareness that I want to get into the real estate industry. What piqued this interest is two months ago, I had a job relocation about three to three - and - - half hours away from where I live. It was an unexpected move, and one in which my travel and hotel fees have risen drastically. So, I had tto make a decision on what I'd do with my place...
Once all other options had been considered, I decided to sublease my apartment, and found a sub-leasor. In hindsight, I've made a few mistakes, chiefly being that I agreed to pay all utilities and 25% of the rent; and that I've just recently (this month) began to look for a place of residence at my new work city. I wasn't very proactive in my living arrangements! However, by and large, I've enjoyed having a "renter", it excites me, and has opened my mind to the thought of a career change...
I know nothing of the industry, I really don't know the difference between an agent and a broker, etc. Is what I'm really interested in is being a landlord? If so, what do I have to do to start on that path? Where do I have to start towards getting a license? This scenario in my mind is that I'm able to buy and renovate older properties; my mind's eye really excites me!
I have no previous higher education, so in that sense I am "unskilled". But I have researched a bit into getting a license, just not sure if that's where I should start. Please believe me, I am willing to do whatever type of education I need to start on this new path. I just need to hear from you real people, who actually have experience in the industry...
I'm currently in the restaurant industry, diner/casual dining, and have been with the same franchise/corporation for 19 months. I do enjoy it, and am not sure that I want to abandon it (just want to diversify myself). There is a greater than 50/50 likelihood for career growth in coming years, but I realize that I do not want to do this for the rest of my life, so thought on the "next journey" has begun. Recently turning 25 has me feeling old and the clock is ticking! Also....I am a convicted felon. I had some rough years when I was younger, and I did over 3 years in prison between 17-20, with other stints in jail before and after. However---September will be 5 years since I got out of prison, and it has been over 3 years (early-2011) since my last felony conviction. What and how could this affect my decisions on breaking into some arena of real estate?
I am so sorry this is so long! I am open to any and all suggestions! I am thick-skinned, and I've never been afraid of hard work to achieve a goal, so any and all comments and suggestions! I appreciate everyone's help!
I know nothing of the industry, I really don't know the difference between an agent and a broker, etc. Is what I'm really interested in is being a landlord? If so, what do I have to do to start on that path? Where do I have to start towards getting a license? This scenario in my mind is that I'm able to buy and renovate older properties; my mind's eye really excites me!
You need a source of ready cash to buy and either flip or rent houses. You also need to know something about construction so you can evaluate what properties are worth and what it will take to fix them. If I were in your position, I'd look into getting into one of the construction trades, like HVAC/plumbing/electrician. You will get to see lots of different properties -- when you go out onto jobs, ask yourself what makes them desirable or not. At the same time you can sign up for evening real estate classes at the local JC and save up the cash you're going to need.
However, by and large, I've enjoyed having a "renter", it excites me, and has opened my mind to the thought of a career change...
Well, there is nothing about having renters that excite me. They all suck at some point. Only the rent check keeps me going.
What you need first is something to rent. Renting your rental is not a good plan and may lead to your eviction. Next you need money, lots of savings. Sometimes renters, various reasons, will not pay rent. You will need to evict them and that can take time, sometimes up to a year. And all that time you will still need to pay your bills such as a mortgage.
Yes, you can make money at it, but sometimes you loose money too. Lots of money. Although repairs and unforeseen circumstances can set you back a year of money, long term its worth it.
3 hours is too far away in my opinion. It needs to be local. If you cant keep an eye on your property and make sure its taken care of, it will get trashed. Even if you rent to a sweet little single girl, 4 months later her new abusive biker boyfriend might trash the place.
I hear what you all are saying. I am definitely going to sign up for real estate classes, that seems the logical way to go. I forgot to mention I work and live in two different states. So I'm pretty sure I'll be taking classes in the one I'm currently working in. Appreciate the suggestion on handyman trades, but I won't be taking those courses. Tried HVAC 4+ years ago. I only went to 2 or 3 classes, but I didn't like it, and have no desire to try it again...
I figured out that it isn't really a good idea to rent my rental. That's what started my interest in learning more about how to get into real estate. And i have v already started savings, at least with what I already have. While I'm beginning these classes, what is a good number to to save each month? 10%? 20%?
While I'm beginning these classes, what is a good number to to save each month? 10%? 20%?
If your really serious, you need to cut your expenses to bare bones, no cable, eat rice n beans and save the rest of the money. The percentage doesnt matter. Save every penny you can.
As a convicted felon, your ability to get a real estate license will be greatly limited. I'm not saying it can't be done, but I'm sure that in most states that will be a big hurdle to overcome, if it can be overcome at all. Perhaps with enough time and a good, clean work record, it could be possible (check into your state's requirements for a license).
However, there is a lot that you can do "in real estate" without getting a license. I would strongly suggest that you keep your regular employment and just try doing some extra work on the side. Above all, it takes money to make money, so save up as best you can. For anyone looking to invest in real estate, I think their first investment should be their own personal residence. It makes little sense to me to buy real estate while also paying rent to a landlord. At your age, and assuming you are handy and willing to work, you should look at buying a fixer-upper that you can fix up and sell down the road. If you live in the house as your primary residence for 2 years, any profit you make will be tax exempt--so that is a big plus. You can't reap that benefit with any other type of real estate.
After you're settled in your own house, you could consider buying another property. Although some people can and do make money being a landlord, I think a better tact is to simply buy property to fix up and flip (perhaps renting for 1 year to realize long-term capital gains tax advantage). When I was in my 20s, I bought one or two distressed properties every year for several years. I fixed them up and rented them out. In hindsight, I wish I would have sold the properties after 1 year and re-invested in other properties. I made money as a landlord but, to me, it became a real pain. I got tired of fixing up properties time and time again after tenants moved out. Many of my tenants were good, but a few really spoiled the experience for me--and the laws in my area are really slanted towards tenants.
Whatever you decide to do, get some more education. Check to see if your state provides any special educational opportunities to those in your circumstance. It's certainly cheaper for a state to provide education than it is to provide room and board. Take advantage of whatever opportunities there may be.
Even if no such programs exist, and even if you can't get licensed, take a general real estate course to get a basic understanding of real estate principles. You may be able to take a class at a community college or at a regular real estate school. It won't hurt you to learn as much as you can. And check into other classwork as well--certainly you have other interests, too.
Life is too short to screw it up. Keep your past behind you and just look to the future. There's a lot you can do if you put your mind to it. Good luck.
Last edited by jackmichigan; 06-13-2014 at 01:28 PM..
Reason: typo
For anyone looking to invest in real estate, I think their first investment should be their own personal residence. It makes little sense to me to buy real estate while also paying rent to a landlord. At your age, and assuming you are handy and willing to work, you should look at buying a fixer-upper that you can fix up and sell down the road. If you live in the house as your primary residence for 2 years, any profit you make will be tax exempt--so that is a big plus. You can't reap that benefit with any other type of real estate.
Murkside, jackmichigan is 100% right and not only with any other type of real estate, with any other type of investment that is available to ordinary humans (as compared with the super wealthy). As long as you are young and unattached, buy a house cheap, fix it up, live there for two years, sell, repeat N times. You may get caught in a slow market, but then you will still have a place to live while you wait it out. Being a landlord gets old real fast, even with good tenants, and especially at a distance. Unless you are comfortable with being a slumlord, it is very hard to make money.
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Originally Posted by murksiderock
I just turned 25 years old, and recently (last two months) I've had an awareness that I want to get into the real estate industry.
I know nothing of the industry, I really don't know the difference between an agent and a broker, etc.
I have no previous higher education, so in that sense I am "unskilled".
However---September will be 5 years since I got out of prison, and it has been over 3 years (early-2011) since my last felony conviction.
All of these things from your original post will make it very difficult for you, especially the last item. I won't pretend to know how every state handles it, but in my state I had to pass a criminal background check to become a licensed realtor. I do wish you the best of success though.
The first thing you need to become a landlord is some seed money, perhaps about $250K.
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