‘How do you guys feel about staying home with my parents while I buy rentals properties?’: I have savings and support, but should I leave the nest to invest in real estate?

Hi Money Minder,

Hey Money Minder,

I’m Jake, a 22-year-old financial analyst in South Florida. I’ve managed to save up 55k in the past four years, but I know I’ll need way more before I dive into real estate investing. The good news is, I graduated college debt-free, and my only debt is a measly $600 credit card bill. Right now, I’m chilling at my parent’s place, where expenses are minimal – just the electric bill and my car insurance.

My folks are cool with me sticking around, especially since their mortgage is paid off, and let’s be real, we get along great. But everyone and their grandma is telling me to fly the coop since I have some cash saved up. I’ve been tossing around the idea of buying rental properties out of state, given how pricey houses are here in Florida. My parents are on board, and I’ve got a relative helping me navigate the real estate investing world (shoutout to them!).

Since most loans require a couple of years’ worth of W-2s, I’m planning to beef up my savings over the next year or two. I want to stash away around 80k to 90k for a downpayment, reserves, and still have a cushy emergency fund. I’m eyeing properties in Cleveland, Kansas City, and Indianapolis.

So, what’s your take on me staying put with my parents while I dip my toes into the rental property game?

Catch you later,
Jake

Response from THE MONEY MINDER: Thank you for reaching out. How can we assist you with your financial needs today?

”Hello There,”

Congratulations on graduating debt-free and managing your finances so responsibly at such a young age. It’s impressive to see that you’ve saved up $55k over the past four years and are already thinking about investing in real estate. It sounds like you have a solid plan in place and are actively seeking guidance from experienced individuals in the field, which is a great step towards success.

Considering your current living situation with your parents, it seems like a financially savvy choice to stay at home, especially since they are supportive of your goals and you have a good relationship with them. Living rent-free allows you to save more money towards your investment goals and provides you with a solid financial foundation.

Buying rental properties out of state is a smart move, especially if the local market is too expensive. However, it’s crucial to thoroughly research and understand the markets you’re considering and to continue building your savings for a down payment, reserves, and emergency fund.

As for the advice from friends and family about moving out, it’s ultimately your decision to make based on your personal goals and financial plans. If staying at home aligns with your financial objectives, there’s no harm in continuing to do so. Remember that everyone’s financial journey is unique, and what works for one person may not work for another.

In conclusion, it appears that you have a solid plan in place with the support of your parents and knowledgeable mentors in real estate investing. Keep focusing on saving, educating yourself about the markets you’re interested in, and preparing for your future investments. Your dedication and financial discipline will undoubtedly pay off in the long run.

Best of luck on your real estate investing journey!

THE MONEY MINDER