Where do I start?

Question

Hello, BP community!

I am an aspiring 18-yr-old investor. I am wondering, where can I possibly start? I will be attending UNLV and pursuing a BSBA in real estate, but what more can I do to prepare myself? Ideally, I would like to start ASAP. I'm hungry and have a bit of time to learn. All advice is welcome and I appreciate all of it!

Thanks,

Michael Schwob

Michael Schwob · Answer

I'll work on building up my credit by getting a credit card. I'm also educating myself on how to get money from private lenders, so hopefully that will help me.

Thank you to everyone who has replied. I greatly appreciate all of your advice. I hope to see you around some day!

-Mike

Sam Steadman · Answer

@Michael Schwob

Nothing is stopping you from investing at an early age... like 20 years old!

-Lenders are looking at a couple things... They are looking for a strong credit score (WORK ON THIS NOW, get a college credit card with a max of $800-$1000 and use this sparingly. It will help you build up a healthy credit score and make sure to always pay it off).

-They will need verification of funds for downpayment. The bank will visually request to see the funds for a downpayment so have this in a checking or savings account to show proof.

-Lastly, the most important is probably proof of income. If you have a salaried position that helps big time for a lender. Think about it, it lowers the banks risk of you defaulting on your loan b/c you have proof income coming in for the entire year and allows them to have more confidence in your ability to payback the loan. Of course, there are ways around this if that is through cosigning or going 50%/50% down with someone who can show proof of income if you cannot. In addition, if you had a friend or family member willing to help and make a little bit of money, they could purchase the home for you and then you could "purchase it from them" through a Contract for Deed financing. In the case of a Contract for Deed, the friend/family member acts like the bank. It is a possible way around conventional financing that would allow you to purchase an investment property earlier than could had been done before.

Matt Jones · Answer

@Michael Schwob

There is no problem with investing at an early age but there are some challenges.  You mentioned building credit, that and steady verifiable employment are important if you plan on using bank financing.  Hard Money & Private Lenders tend to want to see a successful track record and/or a substantial down payment so keep saving up and look for ways to gain experience.  I'd recommend finding investors in your area and working for them to gain experience, build that successful track record I mentioned and make valuable connections that will be needed down the road.  It sounds like you are on the right track to get in the game early and be successful, keep it up!

Michael Schwob · Answer

@Sam Steadman

Thank you so much for your in-depth response. I truly do appreciate this!

With that being said, is there a problem with investing at an early age- say 20? I am already saving money for my first down payment, but will may age deter lenders and loans? Also, I know I have to build quality credit. Is there a way to do this quickly within a few years? I currently do not have a credit card, just debit.

Thank you so much for your response again! I am very thankful!

Sam Steadman · Answer

@Michael Schwob

Network. This is HUGE when it comes to your ability to find success. This can be as simple as treating people kindly in your classes and getting to know them on a personal level. Also, this can be taking a leadership role at your University if that is in the business department or elsewhere. No matter what, treat people with kindness and give everyone their due respect.

READ. Always be looking to learn new things and different strategies and mindsets. Too many people graduate from college and quit learning... Come on!! What a terrible idea. Never stop learning and be constantly reading books to get ahead of others who are not willing to do so.

Start Saving. Set a goal to save money every year if you can. Many people when they graduate are held down and forced to rent because of an issue with receiving financing. This can be better resolved if you have CASH for a downpayment... Even if that is only an ability to put down 3.5% or 5%. A great plan is to have a goal of placing 5% cash down on an investment property and have a GREAT job to show proof of income to lenders. If you plan 3-4 years ahead of graduation you can achieve that goal.

Work on your values and ethics. I believe that this is CRUCIAL to success in Real Estate. Learn how to treat people well and place their needs before yours. If you can do this, people will learn to trust you and they will want to help you in anyway they can. Be a good guy and honest. Nothing is more important than in business/Real Estate as your REPUTATION. Start out strong building that healthy reputation and it will follow you throughout your life.

Hope this helps. I love your tenacity and drive for success. Not many people at 18 years of age are thinking like you and that WILL pay off for you in the future. Let me know if I can help in anyway possible.

Sam