Millennial Money

Barbara Corcoran reacts to a 24-year-old who earns $120,000 and owns 3 rental properties

Barbara Corcoran reacts to a 24-year-old who owns 3 rental properties

Real estate expert, TV personality and "Shark Tank" judge Barbara Corcoran thinks Garrett Ramela is on the right track when it comes to his finances.

The 24-year-old not only earns a base salary of $120,000 from his day job as a defense contractor for a tech company, but he is building an impressive portfolio of rental properties. He owns two places in the Washington, D.C. area, where he lives, and another in his hometown of Pittsburgh. 

One way he's been able to afford to invest in real estate at such a young age is by taking advantage of a VA home loan, which he  has access to because he's a former Marine. Corcoran approves: "He's a smart kid. The biggest benefit going into the military is not while you're in the military, it's after you get out. There are so many benefits, and he's immediately taking advantage of it."

The VA loan allowed Ramela to purchase his D.C. area properties with 0% down, no private mortgage insurance and competitive interest rates. With those terms, "why wouldn't you buy an apartment?" Corcoran asks, reacting to CNBC Make It's Millennial Money episode that features Ramela, which was filmed in fall 2019.

The first chip you have on the board gives you the right to play the game.
Barbara Corcoran

Even though most people don't have access to military benefits like Ramela, they can copy his strategy of leveraging the properties he already owns in order to buy more, Corcoran says. "It is an opportunity that is available to everyone…The first chip you have on the board gives you the right to play the game."

Long-term, Ramela views rental properties as a way to generate a steady stream of passive income, which Cocoran agrees is a clever move. "The tenant is paying off your mortgage, and that's the golden ticket," she says. "You just have to take the risk — the tenant pays off your mortgage and you're getting income all along the way." 

Corcoran is concerned with Ramela's goal to buy properties all across the U.S., however. She recommends he continue to buy in areas he's already familiar with. "Everybody I know who lost money in real estate lost it in somebody's else's ball park," she says. "If you know your neck of the woods, stay with it until you've saturated it." 

But overall, "he's made it," Corcoran says. "He's on the road to riches."

Watch Corcoran's full reaction to Ramela's spending and savings habits.

CNBC owns the exclusive off-network cable rights to "Shark Tank."

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