So it seems real estate is the only guaranteed way to become rich

How did you start off in real estate investing?
What advice would u give to someone in there early twenties wanting to get started

Well, I started really investing in 2009 after the crash. To me, it was a dead obvious move, the prices were incredibly low. That got me hooked, but what made me stick to it was job market realities. I'm a programmer and, in this business, you'll peak in your late 30s and your viability starts to drop after that. So I had to find something that would replace my income and I decided that real estate would be it.

I know there will be some people that will totally blast me on this, but my advice is to get into big-time debt. (This ONLY applies in the US, other countries are dangerous RE-wise right now) I'd make it a goal to obtain at least one million dollars in fixed-rate mortgage debt by the time I was in my 30s. You've got a max of 10 mortgages you can have, that's ten cashflowing rental properties with 100k in debt apiece, give or take.

Then once you do that, there's lots of ways to go. Traditionally, you can start paying them off with the cashflow. (Mathematically, it's fastest to do it one mortgage at a time than all at once, so do that.) Or, you can pump the cashflow into non-cashflowing investments like an index fund (they do have their place) and let the mortgages pay off naturally. So, when you get to 60, you have ten paid-off properties plus 30 years of cashflow in an index fund.

But, you have to tailor your strategy to your goals. Do you need to retire early like me? Do you want to keep working to grow things more? If so, then max cashflow shouldn't be your main goal. To the extent that you invest for cashflow, you inhibit capital growth.

First, though, get on bigger pockets and learn about what makes a good deal and the mechanics of rental properties. Then (at this is the most important) go and do it. The first rental is always the hardest. Good luck!

Thanks for the advice, even though I'm from the UK and this might not apply to me as much this was close to what I had in mind anyway!

I'm just worried if I'll have enough time to go save up enough for deposits before I'm 30 to be where I want to be at portfolio wise

I don't know anything about how real estate behaves in the UK. But, I'd look hard at the way mortgages work in detail as well as price-to-rent ratios. Again, learn what a good deal looks like and *only* buy those deals.

There are many places where someone shouldn't invest at all in RE.

>So, in retirement, when your investments matter more than at any other time, you MUST start to cut into your principal. To me, that's simply insane.
Why? Your money is meant to be spent, I don't plan to bequeath my estate to my queefs of offspring, so the ideal scenario is that you run out of savings precisely when you die.

>And I can beat that without even getting out of bed, plus no principal reduction.
Yeah except the part where you have to deal with renters, laws, and management companies.

Here's why I think equities index funds are great, and they're not always. They're most effective use is in tax advantaged accounts. Index funds benefit from also being the cheapest option in terms of expense ratio, meaning you have a savings vehicle that:
1. avoids having your hard earned money from going to the government, where it is spent on welfare and the military industrial complex
2. avoids having your hard earned money go to pay some kike fund manager
3. beats inflation at the very least
4. and also retirement blah blah blah

>guaranteed?
No
>high yield?
Yes

Personally I would look to rent something stable with high enough margins.

I'd take a 8% ROI on an apartment complex in a medium sized city, than a 12% ROI in a city that is booming with high rent and RE is overpriced.

You have to remember that real estate is a long term commitment, and you may not be in a good position to sell when you want to.

Aim for relatively safe investments (not influenced by the market as much), that bring in good income. Use leverage in a hot market, and sleep soundly that you'll be able to cover your lenders fees even in a bad market.

You're not going to get 8% ROI in real estate, unless you value your time at 0, or are renting a shit-tier neighborhood.

>> Why? Your money is meant to be spent
Yes, sure, but with any sort of draw-down, there's a risk of running out before the grim reaper punches your ticket. A chronic illness crops up, a couple of hospital visits go by, and it's easy to eat up that 3% SWR rate. Add in a market downturn, your portfolio can start to spiral. Next thing you know, you're hauling your old bones out of bed for your shift at the coffee shop. Yikes!

>>Yeah except the part where you have to deal with renters, laws, and management companies.
Nope. When I mentioned 'without getting out of bed', I actually meant exactly that. I'm talking about real estate notes. Passive, high-yield real estate investments with no tenant issues. Sure, you should have rental property, but not all REI is rentals. And, the older you get, the more that non-debt-based investments like notes should factor into your portfolio.

>>They're most effective use is in tax advantaged accounts.
I've seen this said before and I just don't get why this is true. Maybe someone can explain it to me. Index funds have a very low tax profile to begin with. (I've said before that the cashflow from them is small). So having them in a tax-advantaged account doesn't really help that much. Wouldn't you prefer your heavily cash-flowing investments to be sheltered?

Again, I've read a lot about how index funds work, but it just seems to not work very well. My take is that they're a reasonable way to build wealth but it's tough to shoe-horn them into working for you as practical income.

So like REIT's? Don't most total stock market funds include some? That SWR is based off statistics from the Trinity study, the chances of exhausting all your savings, especially when social security is taken into account is extremely unlikely. At the same time I'd imagine it'd be a huge pain in the ass to liquidate your real estate investments when you're an 80 year old with cancer.

>I just don't get why this is true.
>it's tough to shoe-horn them into working for you as practical income
they're not directly income, but you are getting massive savings in the form of tax reduction and low costs, compounded over decades.

If you're using a taxable account then yeah you can allocate stock funds to that and use the tax advantaged space for other stuff.

Real estate wouldn't take any less time to build net worth with any manageable level of risk.

wrong

Depends where and how large. With smaller apartment buildings or houses in Australia for example, you can.
But I'm pretty sure the Strayan housing market will collapse soon.

>So like REIT's? Don't most total stock market funds include some?

No.

youtube.com/watch?v=pA8DdkM2Wqo

Anyone have any real estate advice for an Ausfag?

I've been a public servant for three years and I've got 40k in the bank as well as job security. I'm thinking of buying, but, while I'm sick of renting, I think it makes more sense at the moment to buy a property I intend to rent out to others rather than buy an apartment for myself.

Feels like the market is kinda shitty at the moment, certainly in Canberra anyway. I feel like I should look to buying elsewhere but I really don't know how to even begin researching good places to buy.

you sure?

>You must be already reach to invest into. Is just a relative safe investment,
This.

>What I don't like about index funds is that it's a pure growth vehicle with tiny cashflow.
damn straight. I want revenue not just equity!

>>So, in retirement, when your investments matter more than at any other time, you MUST start to cut into your principal. To me, that's simply insane.
>Why? Your money is meant to be spent, I don't plan to bequeath my estate to my queefs of offspring, so the ideal scenario is that you run out of savings precisely when you die.
You don't know when you're gonna die. How much liquidity do you need to continue a lifestyle you're comfortable with and have a bit of emergency money on the side when you need that hip-replacement or scooter?

Of course that's just the prudent course, you could try and liquidate and spend while you're young and hope that you die prematurely.

You're fucked, this is the worst possible time to be a buyer and best time to be a seller. i live in a very asian neighborhood, not gonna say where. Three bedroom houses going for over a mil and rising. not even close to the city center either. You best think of another way to compound that cash in the short term, after all interest rates suck at the moment.

Having said that places in Queensland is probably your best bet, properties are still within reach but it's a market which will just continue to grow.

Also keep an eye on apartment blocks in Sydney and Melbourne, I have no idea what's going to happen there, demand should be dropping because the Big 4 just realized how many of those chinese loan applications were fraudulent, but construction keeps on going on

With interest rates headed back to normalization it's not a great time to buy real estate unless you come upon a great deal or are renting.

If you buy now you'll be fighting tightening for the next several years. Hope the economy takes off faster than the Fed or you'll be lucky to break even... especially since the average buyer is financing for 30-40 years now. Interest over 3-4 decades has a major affect on affordability.

I'd argue that, based on your statement, that it's a great time to buy. Lock in fixed rate debt before the rates go up.