Starting from scratch at 19

[Israel Glusman]

I'm 19 and a college freshman looking to map out my path into real estate investing. I'd love some feedback on my game plan and hear what you wish you'd known starting out.

Here's what I'm thinking:

1. Land a decent-paying job to start building savings

2. Save up for a 3.5% FHA down payment on a triplex or quadplex

3. House hack it — live in one unit, rent out the others, and fix it up over time

4. Build equity, then roll it into a nicer property and repeat

I know I'm playing the long game, but I'm okay with that. I also have some family connections in the industry (my great uncle runs a large RE firm in NYC and my dad is a commercial agent), so I have people to learn from — but I want to build this myself and not lean on them as a crutch.

A few things I'm genuinely curious about:

- Is house hacking a quadplex a realistic first move at my age/income level?

- What would you do differently if you were starting from scratch at 19?

- Any pitfalls with the FHA multi-unit route I should know about?

- How did you find your first deal?

Appreciate any wisdom you're willing to drop. This community has already taught me a ton just from lurking. I am excited to actually engage!

[Dan H.]

Here are some of my thoughts:

- fha is typically not what I would recommend for a few reasons (as @Remington Lyman suggested without stating why) 1) there are 95% LTV OO options 2) fha has sustainability requirements beyond duplex. In effect this makes using a super high LTV fha for a triplex or quad near impossible 3) last I was aware pmi is life of loan on fha. Home appreciates, either via value add or market appreciation, such that your equity exceeds 20% typically results in the dropping of pmi, but not with fha loan 4) stringent conditions standards eliminates the highest value value adds,

- you plan is good, but imo it would be better if combined wth a value add.   I cannot achieve the returns I mandate as an LTR without a value add.

- you did not mention the 2 of 5 years rule so unsure you are aware but living in the home at the front for 2 years out of 5 years means $250k if gains is forgiven.  Goal should be every couple/few years to maybe scale up if necessary by selling.

- do not discount other forms of below market financing. For example OO investors have order of magnitude more assumable loan options than non OO buyers, Some motivated sellers with a lot of equity could benefit by providing owner financing to potentially reduce their tax consequences.

Good luck