- Karina Mejia purchased her first property, a three-family dwelling in Boston, at age 22.
- She lived at dwelling and labored a number of jobs to avoid wasting up for a down cost.
- She’s a full-time actual property agent and earned nicely over $300,000 in commissions in 2021.
Seven months into her first salaried job out of faculty, Karina Mejia realized she wasn’t in the correct place.
“I bear in mind wanting across the workplace and there was no one I wished to be like,” she advised Insider. “And that was an enormous crimson flag.”
Mejia graduated from Boston School in Could 2019 and took an analyst job at a Boston-based actual property consulting agency in June. “It was very company America,” she recalled. “It was me observing a display from 8:30 a.m. to 7:30 p.m. It was simply not fulfilling.” It paid nicely for a primary job, although: a base wage of $65,000 a 12 months.
She already had her actual property license, which she acquired in faculty, and had even closed a few offers on the facet. The primary huge fee she earned was in August 2019. She collected an $8,000 verify, she mentioned, and that is when she realized simply how profitable a profession as an agent may very well be. She’d lose the safety that comes with a salaried job and a constant paycheck, however had the chance to spice up her earnings tremendously.
“With gross sales, the query is at all times: Am I adequate? Can I construct this enterprise? Can I be that particular person?” mentioned Mejia. She determined to guess on herself and stop her company job in January 2020 to go all-in as an actual property agent.
“I had no thought who my subsequent consumer was going to be or if this was even going to work,” she mentioned. “However I simply bear in mind pondering, ‘I am 22. If this does not work and I’ve to return to company America, then superb.’ I left on good phrases with my boss and that was at all times an possibility however I undoubtedly took a leap of religion.”
The chance paid off: Mejia, now 25, earned $342,000 in actual property commissions in 2021. Insider reviewed gross sales fee studies that confirmed these particulars.
This is how she began constructing her actual property portfolio at age 22 and the way she invests her six-figure earnings.
Residing at dwelling and dealing 3 jobs to avoid wasting for her first property
After graduating, Mejia moved again in along with her dad and mom, who additionally stay in Boston, to avoid wasting on housing. She could not justify paying for hire when she had a free possibility, even when it meant transferring again into her childhood bed room.
When you have the power to stay with household at the beginning of your profession, it would not should be as huge of a sacrifice as it could appear, she mentioned. “You do not have to suppose that you simply’re giving up your freedom. It is only a sensible monetary factor to do for the primary 12 months or a few months as you are getting began and paying down your loans.”
Mejia had $15,000 price of pupil loans however her precedence was to spend money on a property. “That was at all times my first purpose, as quickly as I might save up sufficient cash,” she mentioned, including that it made sense for her financially: The rate of interest on her loans was round 5%, so she determined that if she might get greater than a 5% return elsewhere, she’d be superb delaying her mortgage funds. “It was a matter of the place was my cash higher spent.” She nonetheless made the minimal funds on her loans every month, she mentioned, however did not really feel the necessity to pay them down utterly earlier than shopping for a property.
She began saving for a down cost whereas concurrently on the lookout for a property. Along with her day job, Mejia stored the part-time job she had in faculty as a banquet server on the Boston Harbor Lodge. Plus, she was gathering commissions as an actual property agent.
“There could be days once I was working at my company job, then I might stroll over to my banquet server job at evening, after which on my break, I might be calling making an attempt to barter actual property transactions,” she mentioned. “It was undoubtedly lots at that time.”
It paid off: By late 2019, Mejia had about $30,000 in financial savings earmarked for her first property, she mentioned.
Shopping for her first property at 22 and “home hacking” to offset the mortgage
Mejia was on the lookout for a property that she might stay in and in addition hire out to offset the price of her mortgage. It is a technique generally known as “home hacking” and has helped lots of property buyers get their foot within the door.
She acquired pre-approved with a lender for a mortgage after which stored her eye available on the market. It helped that she knew what to search for. “I wished a multi-family dwelling,” she mentioned. “I wished an income-producing property — one that might money move as soon as I moved out.”
She discovered a spot that match the invoice and submitted a suggestion, however the vendor went with any person else. That purchaser’s financing fell by way of, although, which means the property got here again available on the market. Mejia observed and instantly submitted a suggestion. It included a stipulation. “The vendor wished to carry an open home and I did not wish to give anybody else an opportunity to see it and threat getting outbid,” she defined. “So I gave a extremely nice supply, above ask, and mentioned that it could not be on the desk as soon as the open home began.”
It labored and Mejia closed on the $560,000 three-family dwelling in November 2019. She financed it with an FHA mortgage and put 3.5% down, or about $20,000, she mentioned. She moved in and, by mid-December, had tenants transfer in as nicely. Their hire almost coated her complete mortgage cost, she mentioned.
Increasing her actual property portfolio in Boston and Georgia
In early 2020, Mejia added to her actual property portfolio and acquired her second dwelling in Boston, the place she and her girlfriend Sasha presently stay. She used a loophole to finance it with one other FHA mortgage (these are government-backed loans which might be standard amongst new householders as a result of they mean you can purchase with a small down cost).
“Within the U.S. you may solely carry one FHA mortgage at a time, so we joke within the trade that you want to use your FHA earlier than you get married,” defined Mejia. “It is a joke however it’s stable recommendation: Earlier than you really get married, you must every use your personal FHA mortgage.”
She financed her second property, a three-family dwelling in Boston, however the mortgage is underneath Sasha’s title. They stay in a single unit and hire the opposite two out, which covers their complete $3,500 mortgage, Mejia mentioned, which means they stay totally free.
She additionally owns three properties in Augusta, Georgia. Located close to the South Carolina border and residential of the Masters Event, Augusta got here on Mejia’s radar after she joined an actual property mastermind group made up of buyers all around the U.S. She linked with an Augusta-based property investor who really helpful she look into the market.
“There are a ton of markets within the U.S. that make sense for money move — there are a few issues you want to take a look at however, most significantly, the price-to-rent ratio must make sense — and Augusta is simply a type of markets,” she mentioned.
Buying in a unique state required extra due diligence, but it surely helped having a contact who knew the realm nicely, she added. “Everyone knows that locations can fluctuate road by road. I do know that very nicely in my market however I clearly cannot inform in a market I am not as accustomed to. That is the place I actually leaned on my connection.”
In complete, Mejia owns 5 properties and has a sixth underneath settlement that she expects to shut in February 2022.
Incomes almost $400,000 in 2021
Mejia earned about $43,000 in rental earnings from her 4 properties in 2021, she mentioned. The majority of her earnings, although, got here from actual property commissions. In 2021, she earned $342,000 in commissions on the 42 offers she closed.
Her fee varies between 2% and three% of the sale. The largest fee she earned in 2021 was $14,880 on a $620,000 dwelling she offered in September.
She did not anticipate actual property being so profitable. When she stop her analyst job in early 2020 to be an agent full-time, she got here to phrases with the truth that she might need to return to company America if it did not work out. She additionally stop realizing that she had her server job to fall again on, however when Covid hit, “that trade closed down for a very long time and I did not have any work on that finish,” she mentioned. “So the one manner I might generate income at that time was by way of actual property.”
Mejia additionally began an eCommerce retailer in 2021. “It is basically drop transport,” she mentioned. “So I purchase dwelling items from different shops and promote them for a revenue on Amazon.”
She’s specializing in growing her earnings in 2022. Her purpose is to earn a further $3,000 per thirty days in passive earnings. To take action, she’s going to look into short-term leases. “The earnings on a short-term rental is greater than on a long-term,” she mentioned. “You may count on $2,000 to $3,000 in revenue per thirty days, relying on the place your leases are.” One other one in every of Mejia’s targets is to achieve a internet price of $1 million earlier than she turns 28.
If you wish to begin investing in properties, “determine what the following best step is and do this,” suggested Mejia. “If that is an owner-occupant dwelling, then do this. If that is a turnkey dwelling, then do this. However take motion. The benefit I’ve is that I purchased a house at 22 years previous after which, by the point I used to be going to do one other funding, I already knew what to anticipate. I already knew what to do.”