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Sawyer Ballard
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Tips for a 16 year old aspiring investor

Sawyer Ballard
Posted Sep 28 2022, 17:28

I'm 16 years old and I've been researching about real estate investing for the past year and I'm fully committed to it. My goal is to buy my first rental property when I turn 18 and I'm confident that I'm on the right path to do so. If anyone has anything they would like to share that they wish they would've done at my age or what they did that helped them such as finding a mentor or getting a job at a real estate related company to learn, I would love to hear it all. Thanks!

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Jason Wray
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  • Florida
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Jason Wray
  • Banker
  • Florida
Replied Sep 28 2022, 17:34

Sawyer,

Ask your parents or a family member to help buy you your first home.  They can add you to title and in 2 years you can refinance the home into your name, take out some cash and buy an investment home.

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William Bowers
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William Bowers
  • New York
Replied Sep 28 2022, 17:52
Quote from @Sawyer Ballard:

I'm 16 years old and I've been researching about real estate investing for the past year and I'm fully committed to it. My goal is to buy my first rental property when I turn 18 and I'm confident that I'm on the right path to do so. If anyone has anything they would like to share that they wish they would've done at my age or what they did that helped them such as finding a mentor or getting a job at a real estate related company to learn, I would love to hear it all. Thanks!


 Sawyer, Have your parents/guardians put your name on there utility bills, phone bill etc. this will build your credit history and when you turn 18 you will have 2 years of consistent payments (as long as your parents/Guardian pay the bills) Most banks will want 2 years of payment history for a mortgage. 

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Nathan Gesner
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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
ModeratorReplied Sep 29 2022, 05:30
Quote from @Sawyer Ballard:

I'm 16 years old and I've been researching about real estate investing for the past year and I'm fully committed to it. My goal is to buy my first rental property when I turn 18 and I'm confident that I'm on the right path to do so. If anyone has anything they would like to share that they wish they would've done at my age or what they did that helped them such as finding a mentor or getting a job at a real estate related company to learn, I would love to hear it all. Thanks!


You can't sign contracts until you are 18. Even then, you need credit, job history, and money. See if your parents are willing to partner with you. If they sign on the loan, it will get you started and then you can break out on your own a little later.

  • Property Manager Wyoming (#12599)

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Clint Rasberry
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Clint Rasberry
  • Flipper/Rehabber
  • Pennsylvania
Replied Sep 29 2022, 05:46

As the others have said obtaining financing will be your first and biggest hurdle. Go to a local bank or mortgage company and ask them for their guidelines. Typically 2 yr tax return 2 bank statements and recent pay stubs a 620 credit score and low debt ratio. Get a job with a builder and learn to do repairs then move on to learn other parts of the business.

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Paul De Luca
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Paul De Luca
  • Real Estate Agent
  • Chicago, IL
Replied Sep 29 2022, 06:33
Quote from @Sawyer Ballard:

I'm 16 years old and I've been researching about real estate investing for the past year and I'm fully committed to it. My goal is to buy my first rental property when I turn 18 and I'm confident that I'm on the right path to do so. If anyone has anything they would like to share that they wish they would've done at my age or what they did that helped them such as finding a mentor or getting a job at a real estate related company to learn, I would love to hear it all. Thanks!

Get a part-time job in real estate to start making money and gain some experience. Keep studying real estate investing, keep working, and then go full-time when you turn 18. If you do those things you'll be in a great position to starting making moves.
  • Real Estate Agent Illinois (#475.190985)

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Jared Hottle
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  • Cedar falls IA Waterloo, IA
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Jared Hottle
  • Real Estate Agent
  • Cedar falls IA Waterloo, IA
Replied Sep 29 2022, 06:40

There is a lot of great advice here. I think right now maybe ask around to local property management companies or if you know any landlords in town and see if you can get a part time job mowing lawns, shoveling snow, basic rental turn tasks like painting or patching holes. This will give you experience, some money, and start building your network. Talk to them about your goals and you will be amazed at what people will do for you if you work hard and keep showing up. Not sure if you plan on going to college but if so I would target buying a single family or duplex in that college town. Live in it and rent out all the other rooms to your friends or other students. 

Real Estate Agent Iowa (#S68688000)

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Replied Sep 29 2022, 06:48
Quote from @Sawyer Ballard:

I'm 16 years old and I've been researching about real estate investing for the past year and I'm fully committed to it. My goal is to buy my first rental property when I turn 18 and I'm confident that I'm on the right path to do so. If anyone has anything they would like to share that they wish they would've done at my age or what they did that helped them such as finding a mentor or getting a job at a real estate related company to learn, I would love to hear it all. Thanks!


Wow. All I can say is kudos to you for being so young and thinking ahead. With real estate investing you have to walk before you can run. Small steps. If you are able to save 3.5% of a home you can get an FHA mortgage, (can be your own money or can be a gift from your parents) I would start off by purchasing a good condition 2 unit. You will have to live in one unit and rent out the other. That other unit can help pay the mortgage payment in part or in full. That will give you a taste of what it's like to own a home and also give you a start to dealing with tenants. Read everything you can about managing tenants and make sure you are doing everything legal. Go to your states website and look up rental properties, responsibilities of landlords and tenants. Starting small at your age will give you the confidence and experience to move on to bigger deals. Best of luck to you!

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Eliott Elias#2 All Forums Contributor
  • Investor
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Eliott Elias#2 All Forums Contributor
  • Investor
  • Austin, TX
Replied Sep 29 2022, 07:05

Get good with solving problems and working the day to day operation. Hiring/firing contractors, finding deals, building relationships

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Greg R.
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Greg R.
  • Investor
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Replied Sep 29 2022, 07:08

I appreciate the lofty goals, but what's the rush? RE isn't a "get rich quick" industry. Don't believe the fake gurus on IG, Tik Tok and YouTube. People who rush in without knowing what they're doing risk getting burned and becoming "the biggest loser."

Perhaps when you graduate high school you can work on getting your RE license. That would be a good learning experience to help you understand some of the basics. 

Continue to learn, plan to build credit, and save money. At 16 you have so much more to learn than you know. Not only about RE, but about life, dealing with people, managing situations, etc. 

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Replied Sep 29 2022, 07:14

I think that 16 is a fantastic time to think about "what do I want to do with my life." Plenty of people are barreling down a path of borrowing a ton of money for college. If you instead want to focus on being a real estate investor, good for you.

At 18 I lived in a fraternity house and shared rooms. House hacking is very reasonable at 18, less so at 35 with a family, so consider that as a launch pad.

If your goal is real estate investing, you need to remember that it is "investing" - you invest your savings as capital. So you want to focus pretty heavily on generating investment capital.

So I would focus very heavily on what you can do between 16 and 18 to both amass capital for your first purchase, but also focus on what you can do to ramp up your earnings capability fast.

For example, a 5 year plan to get a Bachelors/Masters will generate more income, but won't start until year 6 and will probably have a cross-over point in year 8 or 9. If you borrow money to go there, move that out to 12-13.

A skilled vocational program may generate income increases very quickly, particularly if you can do a high school/vocational combination.

So really focus on what you can do NOW that you won't be working minimum wage service jobs. You don't need to be a lawyer. You don't even need to be a master plumber. But you don't want to work service jobs to generate your capital. Focus on fields you can quickly ramp up your wages.

1. Capital - you'll need it to "invest"

2. Wages - the more you make, the more capital you have

3. Creativity - at 18 you can handle life discomfort easier than at 35

Good luck!

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Apostoli S Hillas
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Apostoli S Hillas
  • Real Estate Agent
  • Salt Lake City, UT
Replied Oct 5 2022, 11:51

Hey Sawyer,

I found myself in the same situation when I was 16. I am only 19 now so I do not have too much to say on this but I'll tell you what I did and my plan (just to give a different perspective than getting in on a deal with your parents). I started by reading books and learning as much as I can about how real estate and business. This includes books that talk about specific strategies of investing, broad categories, investing mentality books (like Rich Dad Poor Dad), business books, marketing books, sales books, mindset books, etc... Start reading and learning as much as you can about everything that creates success. 

Then I found myself in a money dilemma. How am I supposed to generate income to invest? I am still trying to figure this out but am working on some solutions. First, I am working on my credit to retrieve bank loans. I want to get an FHA loan which requires only a 3.5% down payment. The other ways I am working on this was getting a wage job and I am currently working on an online dropshipping business.

But then I wondered how I can get capital by learning and working in real estate simultaneously. So I went and got my real estate license because I figured if I can make money in this area, I will have plenty of knowledge of my market and capital to start investing. I am currently learning real estate and have worked on a few deals with some generous partners, but it will sprawl a little bigger once I can really get a grip on it. 

Anyways, that's just my story so far on what I did from your scenario. Lets stay in touch and best of luck on your journey!

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Replied Oct 5 2022, 12:33

I have a fifteen year old in a similar situation.  Right now he works a lot pressure washing and doing landscaping. When he turns sixteen he is going to go to trade school to become and electrician. That will give him w2 job and help him in construction. 

We pulled him out of school to homeschool him this year so we can tailor his education to his interests. We have a podcast that he co-hosts on and he hikes the AT. So he is earning high school credit for those. 

 If your parents have good credit, they can add you as an authorized user on their credit card. You don't even have to use the card but it will reflect on your credit score. 

At sixteen you can volunteer at Habitat for Humanity, a great way to learn lots of construction knowledge and get some contacts. Take advantage of all the great podcasts and read books.

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Cliff Benner
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Cliff Benner
  • Investor
  • Denver, CO
Replied Oct 5 2022, 14:44

@Sawyer Ballard regardless on what you decide to do after high school, take some accounting courses and learn some tax laws. 

Create a budget for you personally and assign every dollar a job; whether that job be to save for a car, business, whatever. Just give each dollar a job. Learn to connect with people, learn that family may be your worst supporters, and networking is one of the biggest and best things in life. 

Normal is not good, normal is 9-5 in a grey cube where you do the bare minimum to not get fired. yes you may need a job to support your passion but following your passion will make doing those hard things in life a little easier.

Also, it doesn't matter where you come from, someone will always make an excuse for you or blame it on luck and never give you the credit for what you did. Some of my cousins tell me I had it easy and was spoiled because I was an only child and that is why I went to college and why I have businesses. None of them realized I worked 6 jobs with full credits one semester, then worked 45 hours a week with a full class load the other 9 semesters I was in, and created a hockey club from scratch to get a job that paid more then they got and allowed me and my wife to start businesses. All that experience and determination is why I did what I wanted to or why I choose to work a business to get where I want to while having a job, to them it was because I was an only child, something they were not.

You are amongst friends that will have very similar situations like that in this community. Most of us don't play the victim and we are going to tell you that you will fail. Own that failure, use it to help others, move on from it.  You are already doing things we all wish we would have done at your age. Attend meetings for real estate, start learning, maybe mow some lawns for the investors you meet by the time you can sign contracts you will be in a much better position then most of us are now.

Feel free to reach out. Good luck Kid.

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Dan Sheeks
  • Rental Property Investor
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Dan Sheeks
  • Rental Property Investor
  • Denver, CO
Replied Oct 5 2022, 19:21

Hey @Sawyer Ballard! As a young beginner, your first step is to read this book from Bigger Pockets. www.biggerpockets.com/teen

It is specifically for teens who are exactly where you are right now - the beginning. This book is your launching point.

I am the author and have been a high school business teacher for 20 years. Let me know if you have any questions. Always happy to talk to beginners who are young like you!

Also, you should read The House Hacking Strategy (also a BP book) by @Craig Curelop.

Dan

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Sydney Todd
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Sydney Todd
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Replied Oct 26 2022, 19:08
Quote from @Sawyer Ballard:

I'm 16 years old and I've been researching about real estate investing for the past year and I'm fully committed to it. My goal is to buy my first rental property when I turn 18 and I'm confident that I'm on the right path to do so. If anyone has anything they would like to share that they wish they would've done at my age or what they did that helped them such as finding a mentor or getting a job at a real estate related company to learn, I would love to hear it all. Thanks!


There are a lot of entry level jobs that can get you involved in the real estate world, but I don't know if any are open for under 18 years old. If I were you, I would just focus on having some type of consistent W2 employment for the next two years to build up some savings & job history. Even if you work at a coffee shop or grocery store, you're still making money & getting to know people in your community! I would also start thinking about credit. If you have the option, I would consider asking a parent (if they have good credit) to add you as an authorized user on one of their credit cards, some let you now or when you're 18. Then you can benefit from the longer credit history. "house hacking" could be a great option to get you into your first property when the time comes! I am a realtor/investor in SLC and I'm always open to talk if you'd like! 

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Replied Oct 26 2022, 19:45

I would say this: understand that at 18, you think you know a lot more than you actually do. I realized that when I was 22 and I thought I had figured it out then. Now I’m 25 and I look at my 22 year old self sometimes with amazement. I would say if you are definitely serious , don’t get distracted. That comes in the forms of sex, partying , drugs , etc. Very easy to fall into the pitfalls that are associated with those things. I’m not saying to live a sheltered life, bud dedication comes with sacrifice, and responsibility. Without those two things you’re done for. If you’re close with family, let them help. That’s all. Good luck 

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Eddie P.
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Eddie P.
  • Arlington, TX
Replied Oct 26 2022, 20:38

I actually purchased my first rental property when I was 18.  When I was 16, I took out a bank loan and started building my credit.  I did that a few times after paying off the last one.  Building your credit is an important step in this process.  The rental property was solely in my name, no co-signers.  I was barely making above minimum wage at the time and was renting a garage apartment for myself.  I used a rental agreement to show I could pay the mortgage.  When I turned 19, I purchased a duplex.  I lived in one side and rented out the other.  I still had my near minimum wage job while doing all of this.

I wish I could say that awesome start made me super wealthy, but I wasn't married to the right person and life took a serious southern turn by the time I was 21.  Now much older and trying to get back to my original path.  You can do it!  Don't let anyone tell you otherwise.  I had zero experience and the internet wasn't around for all this free advice back then.  Maybe why I was successful.  No one told me I couldn't do it, I just did it.

Good luck!