Preparing To Become A Rental Property Investor

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Preparing To Become A Rental Property Investor

Aj Fortson
New to Real Estate · Middle TN · Member since 2024 · 7 posts · 2 votes

Hello Everyone!

I am a 17 Year old that is very determined to learn how be a rental property investor and had some questions. I finish most of my requirements to be able to graduate at the end of this semester but I just reclassed so I essentially have 2 years before I graduate highschool. This is primarily for basketball but I want to use it to my advantage to learn and do what I need to do to become a real estate investor as soon as I graduate. I do not have a consistent income as I am about to take over my dads lawn business which is seasonal and I have never worked at a normal job (so not on tax forms). I do not have credit but I have been trying to remind my dad to help me get a credit card to build my credit. I have been eager to learn and have been spending a lot of my time reading, listening, and watching, whatever I can about real estate investing. But I really just need some advice on where to start. Should I get a part time job for consistent income and to save cash reserves and get a credit card now? And if so what else can I do to truly prepare myself to be able to invest as a young adult? If you want to know what my specific plans are for real estate just ask me. Thanks!

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Paul Merriwether
Investor · Oakland, CA · Member since 2015 · 141 posts · 84 votes
2y

@aj 

@Aj Fortson CONGRATULATIIONS on deciding to make real estate apart of your future. 
My suggestion is use your lawn biz to meet and work with local RE investors! INVESTORS! Individuals that know how to work the money! Other people's money (OPM). They are buying property in your area and need those laws cut regularly. Even investors like us that purchase property out of state. I recently paid $1200 to have a lawn cut on a large lot. Meet those individuals here on BP & facebook RE groups etc. Read Rich Dad Poor Dad, Free Think & Grow Rich. Also read Scott Jelinek, Slow Flips a whole different approach to RE investing. It's on Amazon for about $13. Or Listen to the audio I think for free as a new subscriber to Amazon's Audio. Then cancel or listen to other RE professionals. 

In terms of building credit that's EASY!!! Start on Credit Karma! Get a Secured card. You put in say $300 and use the card while paying it ON TIME!!! A card that reports to credit bureau's. Within months you'll have a score over 620. Your mother & father or anyone else can add you to their cards as an authorized user and that will help build your score (make sure it's cards in good standing). ALWAYS pay on time on your cards!!! 

BP has great info and thousands of investors, investing in all areas of America. Let me also mention Udemy.com affordable RE education. Now you have all you need to start and become a very successful investor in a very short amount of time! 

WISHING you all the success in the world! 

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  • Phillip Dwyer
    Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    2y

    @Aj Fortson It sounds like you may have already come up with your income generation plan:  taking over your dad's lawn business.  Maybe focus on building that business up first, which will help scratch the entrepreneurial itch you have.  If you scale that business, you'll likely be able to spin off cash that you can use to start investing.  Since some of your clients could potentially be investors, you could start developing some relationships there to assist you down the line.  Maybe there's also a way for you to add services to the business, so that you can generate money all year (think snow removal, ect).  

    0Reply
  • Aj Fortson
    OP
    New to Real Estate · Middle TN · Member since 2024 · 7 posts · 2 votes
    2y

    @Phillip Dwyer Thanks for the advice! I didn’t think about the lawn business being a good potential source for real estate relationships. If I built the lawn business up, would the money from that be seen as consistent income by a bank? 

    0Reply
  • Phillip Dwyer
    Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    2y

    You can get a mortgage loan as a business owner.  They underwrite things a little differently, but it's doable.  So figure out ways that you can level out the seasonality some.  You're probably a couple years out from being able to qualify, but it will probably take that long to build up cash anyway.  When you're about half way towards saving enough for a down payment, reach out to a lender to have them assist you with getting your ducks in a row.  Keep in mind that they will be looking at your tax returns.  Often business owners make the mistake of writing off too many expenses to save on taxes, but then they don't show enough income to qualify for a loan.  It's worth chatting with a lender and your accountant early, so that you don't make the same mistakes.

    0Reply
  • Carini Rochester
    Investor · Rochester, NY · Member since 2016 · 576 posts · 358 votes
    2y
    Quote from @Aj Fortson:

    @Phillip Dwyer Thanks for the advice! I didn’t think about the lawn business being a good potential source for real estate relationships. If I built the lawn business up, would the money from that be seen as consistent income by a bank? 


     Great question, stupid answer. It will be viewed as consistent income if it is consistent income. Document everything. Complete and honest bookkeeping. Keep records. Have an accountant fill out tax forms. Pay income taxes, self employment taxes, etc. Bank will want to see at least two years of tax returns. Business income that grows some each year will look great to a bank. I'm self-employed, so when I apply for a mortgage the bank needs to see my personal tax returns and my business tax returns. Build up a good credit score. Build up a bank balance including emergency funds, money for a down payment and reserves for spending on repairs and maintenance on the investment property. Also, in building up the business market to landlords who need their lawns cut. Add other services, landscaping, painting, handyman, possibly. Someday one of those landlords will want to sell a property and you'll be there, ready and waiting.

    0Reply
  • Aj Fortson
    OP
    New to Real Estate · Middle TN · Member since 2024 · 7 posts · 2 votes
    2y

    @Phillip Dwyer ok I really appreciate it!

    0Reply
  • Aj Fortson
    OP
    New to Real Estate · Middle TN · Member since 2024 · 7 posts · 2 votes
    2y

    @Carini Rochester ok gotcha! That helps a lot! I appreciate the advice!

    0Reply
  • Paul Merriwether
    Investor · Oakland, CA · Member since 2015 · 141 posts · 84 votes
    2y

    @aj 

    @Aj Fortson CONGRATULATIIONS on deciding to make real estate apart of your future. 
    My suggestion is use your lawn biz to meet and work with local RE investors! INVESTORS! Individuals that know how to work the money! Other people's money (OPM). They are buying property in your area and need those laws cut regularly. Even investors like us that purchase property out of state. I recently paid $1200 to have a lawn cut on a large lot. Meet those individuals here on BP & facebook RE groups etc. Read Rich Dad Poor Dad, Free Think & Grow Rich. Also read Scott Jelinek, Slow Flips a whole different approach to RE investing. It's on Amazon for about $13. Or Listen to the audio I think for free as a new subscriber to Amazon's Audio. Then cancel or listen to other RE professionals. 

    In terms of building credit that's EASY!!! Start on Credit Karma! Get a Secured card. You put in say $300 and use the card while paying it ON TIME!!! A card that reports to credit bureau's. Within months you'll have a score over 620. Your mother & father or anyone else can add you to their cards as an authorized user and that will help build your score (make sure it's cards in good standing). ALWAYS pay on time on your cards!!! 

    BP has great info and thousands of investors, investing in all areas of America. Let me also mention Udemy.com affordable RE education. Now you have all you need to start and become a very successful investor in a very short amount of time! 

    WISHING you all the success in the world! 

    1Reply
  • Paul Merriwether
    Investor · Oakland, CA · Member since 2015 · 141 posts · 84 votes
    2y

    @Aj Fortson Also use Youtube see how other RE investors are investing. Pace Morby,
    Scott Jelinek, Richard Kiyosaki video's & other BP investors. Do what is EASY vs complicated and what requires small amounts of money or NO MONEY at all in the beginning. Be patient ... you have a lifetime to build your wealth. 

    1Reply
  • Aj Fortson
    OP
    New to Real Estate · Middle TN · Member since 2024 · 7 posts · 2 votes
    2y

    @Paul Merriwether Thanks for the great advice! I will definitely apply these.

    1Reply
  • Dan SheeksPro Member
    Rental Property Investor · Denver, CO · Member since 2016 · 621 posts · 362 votes
    2y

    My advice would be to read the Bigger Pockets’ book First to a Million (and the workbook). It’s written for young aspiring investors just like you.

    [email protected]Podcast Guest on Show #179
    1Reply
  • Aj Fortson
    OP
    New to Real Estate · Middle TN · Member since 2024 · 7 posts · 2 votes
    2y

    @Dan Sheeks Ok Thanks! Those sound great!

    0Reply
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