Hello, my name is Nick and this is my first post on Bigger Pockets! Let me beginning by introducing my self, I am 18 years old, I am a freshman in college (majoring in entrepreneurship), I am the 2012 South Carolina Young Entrepreneur of the Year. I am extremely interested in owning rental properties and the passive income they can offer. I like to think i am very good with my finances, and have about $10,000 saved at this time. I buy and sell vehicles, car parts, and basically anything I can make a profit on, but I really want to move into a more sustainable investment that will allow me to never have the dreaded "day job". This brings me to my question, i understand business and I do already have what i believe to be the "required" start-up money for buying my first property, but unfortunately do not have any knowledge of where to start. I would like to know what is the best place to start, what type of property to buy, and how to get the best financing for the property.
Thank you for your time!n
Start by backing up one of those cars, and join your local REIA group. There you will network/meet many new and seasoned investors, and will learn a lot.
You are a freshman right now in formal school, but you are a lot further back in REI school. Read, read and read some more. Go to your local bookstore and camp out there. When you reach the point where everyone that works there calls you Norm ("Cheers??"), then you're there enough.
Buying and selling vehicles is how I got my down payment for my first house!
There are lots of ways that you could start but I would recommend buying a multifamily building and renting the adjacent units while occupying one. Maybe fix that one up and move to the next unit. I don't know what property prices are like there but your 10k might be enough for an fha down payment but might not get you far after that in repairs and reserve funds. Being in college I could see credit history being a limiting factor, a way around that might be marketing to owners and getting owner finance or sub 2... riskier (in the case of sub2) and harder to accomplish but you seem like a smart guy!
You've come to the right place with the right stuff! I only wish that something like BiggerPockets existed when I was 18 and starting out. If I had a "do-over", my first purchase would have been a mutlifamily (4 plex"house hack" strategy). With a bit of creativity (google Chad Carson for a great source of information... and Clemson grad!), you can leverage your available funds and break out of the gate in full stride. Best of luck and enjoy the ride!
If you are paying rent or housing costs for college get a place for yourself first. It's easier to get a loan on a place you will live in rather than for investment properties, especially at your age and income. College kids are used to sharing a room or house so you can rent out rooms to friends at a cheaper rate than the college but also enough that your friends should be able to pay all your bills for the house. That gives you a free place to stay, you'll gain valuable experience, it can be a low risk investment, and build your equity in the house and your credit score also. One thing that I regret is not getting student loans and buying real estate with them. I bought my first house when I was 18 and worked through college to get out debt free but if I would have bought more houses with student loans I could have made more than I did working full time. Just be careful, learn what you can and when you run into a problem see it as being a good teacher because your problems can teach you valuable lessons.
Welcome Nick. I'm a soldier in the United states army in the brink of retirement and I wish I had the guts that you are displaying to get started in this business at such a young age. You are definitely in the right place. There is a wealth of information here through networking and definitely listen to the Podcasts. They are awesome. Good luck my friend and whatever you do, stay plugged with through associating with like minded people!
DWAYNE Dwyer, Real Pro-Equity LLC | [email protected]
I was in a very similar boat when i started. I bought a 4 Family.
I would start by talking to a big local bank and have them run your credit and see what price range you could be approve at. At the same time get will a local realtor that is favorable to investors that know what the hell he/she is talking about. To get a range of options and that know the area you want to live in as well as rental rates. See what the lenders can do for you. I think it took 12 no's to my first deal and a big local bank did the deal no problem.
Buy the cheapest house in the best neighborhood that you can offered, best of luck to you.
Wow, a major in entrepreneurship... I wish I had known about that when I was in school! That sounds amazing. And congrats on the award.
If I had to pick one thing to tell a new person about rental properties, I would say first and foremost learn how to calculate numbers on them. The point of rental properties is passive income, so you need cash flow. Most people don't know what constitutes positive cash flow.
I'd also say read up on all Rich Dad books if you are wanting to go the passive income route and avoid the dreaded 'job'.
Nice job Nick! I had 18 cars before I turned 18. I even bought one before I could drive. Before my surf biz I was and I still am a bit of a car nut. Mostly 60s and 70s muscle cars/convertibles. I exported those all over the world. The most recent one I had I bought off one of the editors of Hotrod Magazine. Criused it and then shipped to Sweden, see pic below. It is a fun biz. Keep the flow going to fund your REI is what I am thinking. As mentioned you might be set for FHA as is now. Good luck with your new journey and search!
I know lots of SC investors. Might be able to help you get your first property. I envy you. College years are the best!! Your mindset is far ahead of the average 18 year old. Where do you live? I am working on deals all over the state of South Carolina.
Russ Scheider, Charleston All-Cash Homebuyers | 843.302.1936 | http://charlestonallcashhomebuyers.com
Best suggestions for you are joining your local REIA and meetup groups, listening to BP podcasts (truly educational!), and talking to everyone, as you have. Also be aware you can invest in rental properties with an IRA or retirement account (and get a mortgage for it!) and you can use creative financing (mortgages, seller financing) to help you get started.
It's a great journey and it sounds like you are on your way! Good luck!
Hi Nick, the big thing in real estate is you looking to solve a problem for seller and then help the buyer buy it
On the seller side, you can help people have pretty houses in a very little equity so I'm terms without banks
On the buyer side, you know buyers that are renting right now in the some help being able to qualify for mortgage
Once you learn how to subject to, wraparound mortgage, please option, give private money, do a joint venture, , Study up on Dodd Frank with exiting by selling on terms, then find cash buyers for wholesaling, you'll be in good shape in South Carolina
P.m. me if you have me if you ever
need any help on buying or selling on terms
@Nick Sisk welcome to BP! You are so far ahead of the curve on getting yourself in a great position financially. As you've seen, the BP community offers so much. You've gotten some really good advice. Keep learning, keep networking, and keep asking questions! Good luck!
@Troy Young has the #1 tip I feel. Buy a multi bedroom/bath house for yourself and rent out the rooms. He's dead on re banks will lend on a house you live in,. Right now is the best time of the whole year to buy a good deal. There's fewer buyers from November to early Jan. If you don;t execute soon you'll hit the March onward crush of over paying buyers.
@Brian Gibbons Has phase 2, market for low equity houses by door knocking and yellow letters for nice houses but with low equity that sellers can't sell via agents. You'll buy with a lease and option or subject too and sell on a lease and option with little cash ot no cash and little risk and best of all no banks.
Join local REIAs for the face to face support.
Nick go to www.ccrei.org
this is the link to one of the local REI's in Columbia. You're welcome to come with me as a guest. Next meeting is Dec 18th at Zorba's in Irmo SC
@Nick Sisk Good Luck getting started.
I wish you all the best
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