Summit Capital Partners is a real estate development and management firm that operates out of Puget Sound. They work to acquire off-market real estate and specialize in developing risk-adjusted solutions, allowing an assets’ value to increase over 6-12 months. Summit Capital aims to make a difference in the community where they do business.
Jim Thorpe Details 7 Tips for Investing in Real Estate in Your 20s
If you’re young and just starting out in your professional career, the thought of investing in real estate may seem like a daunting task. But don’t let that stop you from taking advantage of one of the best opportunities available to build wealth for the future. With a few simple tips, you can start investing in real estate even in your 20s and see great returns on your investment. Keep reading to learn more!
Tip #1 Educate yourself and do the research
One of the most important things to remember when investing in real estate in your 20s is the importance of research. Real estate investing is not something to jump into with no knowledge, because it does require a large amount of capital, and there is some risk. When you just starting out in real estate investing it is helpful to find a real estate mentor or real estate mentorship program that provides guidance and tools for success.
Example: Jim Thorpe’s mentorship program Summit NOW provides one-on-one mentoring for all aspects of real estate investing to those wanting to purchase an investment property or learn how to fix and flip.
Tip #2: Set Specific Real Estate Goals
Seattle Real Estate Expert, Jim Thorpe recommends setting daily, weekly, monthly, and yearly goals. Not only is this tool crucial to your business’s success, but it also allows you to see the big picture and possible obstacles that you may come up against.
It is also a good idea to come up with a long-term investment plan. Determine what kind of portfolio you want to build, taking into account your timeline, the amount of time and money you would put in, and how many doors you want. After defining your goals, you can share them with your network and get advice, and possibly a clearer vision for what your goals are.
Tip #3: Save, Save, Save
The most important step to take if you are interested in purchasing an income property at a young age is to start saving. This can be challenging in your twenties because you are likely working with a lower salary and a decent amount of expenses.
One of the best solutions to this is to start paying yourself first. Set aside a reasonable amount of money as soon as you get your paycheck each month. First, see how much you can afford to save after deducting your bills and estimated expenses, and then automatically transfer that amount into a savings account each time you get paid. Make it automatic so you don’t even have to think about it.
Over time, you will be able to save up enough to make your first down payment. And again, the earlier you can start, the better. If you want to start investing as soon as possible, you could even work an extra freelancing job into your schedule, such as food delivery, and save everything you make from that supplemental income into that savings account. You will reach your savings goal in no time and reap the benefits of investing in real estate.
Tip #4: Source Capital
Saving enough money for the down payment is only the first step of buying a rental property. While you start saving, the next step is to figure out how you will finance the rest of the payment. There are multiple options for this. The most common is to apply for a mortgage, which usually requires 25% of the purchase price, and payments for 15 or 30 years.
You can also look into private lending, which would involve borrowing money from friends, family, or other connections, and then paying them back as you would with a loan – this can be a good option when investing at a young age. Another option is hard money, which means borrowing money from an individual who has enough capital to lend out. This usually comes at a higher rate and in shorter terms, so it’s important to make sure that you completely understand the terms of the deal.
Tip #5: Consider Partnership
If purchasing an investment property seems like too big of an endeavor, there are other options that require less capital and less commitment. Consider partnering with a company that specializes in turnkey real estate development and fix and flips. They simplify the real estate investment process and save you both time and money. With this method, you can benefit from having real estate experts source off-market property for you and deliver a turnkey property. This can be a great option to invest in real estate in your 20s.
Tip #6: Network with Other Real Estate Professionals
Real estate is all about relationships, if you start networking now you will see greater success in the long run. One of the best things is to start connecting with investors, contractors, agents, property managers, and inspectors. Making connections in the industry will present many more opportunities in the long run, and it can also be helpful to have people to share ideas, concerns, and challenges with. The best way to do this is to reach out to people on social media, websites, and forums, or join a local Investment Meetup Group.
Summit Capital Partners hosts a weekly Real Estate Networking Happy Hour on Thursdays, as well as monthly real estate education workshops.
Tip #7: Go the Owner-Occupant Route
Being an owner-occupant is a great option if you are ready to start investing in real estate in your 20s. An owner-occupant is when you live in one of the units of a multi-unit property and rent the other units out to tenants, or even rent out a spare bedroom in the house you live in. This method is where a lot of investors start, because it can provide the least amount of risk, and you can qualify for loans with very little money down. Or if you already have a spare bedroom that you aren’t using, you can get started right away and start earning passive income.
For your first investment property, you may want to buy something local so that it is easier to manage and check in on. It can be helpful to find a good real estate broker to help you get an understanding of the market and help you find which properties are right for you.
About Jim Thorpe and Summit Capital Partners
Jim Thorpe of Seattle, WA, has over 30 years of experience in the real estate industry. He works to find high-demand properties in low inventory areas for both developers and homeowners alike. One of his specialties is locating single-family homes in property parcels zoned for multi-family development. His rental portfolio now includes houses, apartments, and commercial properties. Thorpe’s dedication to his business has led to city-wide growth and development in the real estate sector.