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Young Investor Series – 21-Year-Old Invests in Real Estate & Lives Rent Free

Young Investor Series – 21-Year-Old Invests in Real Estate & Lives Rent Free

A main goal of the 8020 Connect Shareholder Engagement Platform is to spark an interest in millennials to further educate themselves on the investing process. Bringing social media into the investment world allows for a new level of transparency and interaction between public corporations and investors, and creates a new environment for making better-informed investment decisions. As a millennial, investing may not even be on your radar, but it should be. This series will showcase four young adults who have had some great success and what they’ve done to generate wealth from the investing process, let me introduce you to Jay from Oregon. Jay contributed his story to a site dedicated to real estate investing, telling his story of how he was essentially born an entrepreneur and investor. He started at the age of 12 selling candy for twice the price he paid. “I realized that the money you make in any venture is made or lost at the time of purchase. For example, had I paid 50 cents for my candy, and sold it for 50 cents, I would have made nothing. I had to horde my supply when it was on sale.” At 18, he purchased a car for $1,200 and sold it three weeks later for $1,500 on a notion that he was not the only one not enjoying the raising gas prices. Over two years, he did this process five more times, always aiming higher. “That's when I stumbled upon real estate--the most stable investment vehicle anyone can put his trust in. So, I began to search for a real estate investment that was affordable for me. The problem is that in the area where I live, home prices have nearly doubled in the last year and a half. Luckily, I was able to find a decent investment before the market exploded. I purchased a four-plex for $152,000.
I am able to live in one of my units, collect the rents, and pay my mortgage. Rent free you might say? Hardly. Never forget taxes, insurance, utility bills, my friend. It comes out to be about half of what I'd pay in rent if I lived in someone else's rental. That four-plex for which I paid $152,000 appraised for $235,000 last month when I refinanced. Previously, I had responded to an ad in the paper from a guy looking for a property for a 1031 exchange [the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale, and hence defer any capital gains taxes otherwise due]. He came over and looked at the place and made an offer of $200,000. That was seven months after I bought. There would have been a $48,000 profit. Of course, once I considered that: 1. That's not enough 2. There were no other properties on the market to put that money towards that would have yielded a better return, I told him that the property was no longer for sale. Instead, I refinanced and dropped my payment by $200, so now I am living there for free.” During this time, he also purchased another single-family home for $20,000 under the market value, which allows him to live rent free, and make a profit by the income from that property. “Recently I've read a lot of posts by young investors, and I thought it would be appropriate to say that yes, we can do this at our age! There are downfalls to being a young real estate investor. But, I envision the downfalls to be the single point of a triangle and the benefits to be the opposite side which is innumerably larger.
I'd like to share a little analogy that my brother used at my wedding when I was 20. In his best man speech, he summarized not only my wife's and my relationship, but also gave me the perfect mind set for a young real estate investor. He said, "When people tell you that you married too young, look at them and say, 'It just gives us longer to love each other.'" How does that relate to investing in real estate? It should be obvious. "When people tell you that you're too young to invest in real estate, look at them and think, 'It just gives me longer to build my fortune.'" “Building a fortune is not for the faint of heart or the risk averse, so congrats to Jay’s success and willingness to ask for more. Making money comes from working hard and taking risks. Losing money is about investing in things you don’t full understand, or investing with people you don’t truly know. Young people today have a massive opportunity in front of them, if they choose to take the step. Digital information and social media will change the investing landscape by giving you , the investor, access to the people and control over the conversation.” Darren Stewart, Founder and CEO of 80-20 Connect Inc.



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Laura Garet

Laura is 8020 Connect’s Client Communications & Social Media Specialist. In 2014, She received her Bachelor of Communications in Information Design from Mount Royal University in Calgary, Alberta. After a couple brief positions in other marketing roles, Laura has found her home with 8020.

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