16 year old Interested in Real Estate

[Noelle Robinson]

Hi, I'm Noelle, I'm from Chicago and currently reside here, and I'm 16. My dad piqued my interest in real estate since he rents buildings and does flips here and there, however he's not very....willing to share his expertise with me until I'm in/out of college since he doesn't want me relaying any information to my mother. It's a whole thing. I'm here because I'd like to learn more about real estate (especially what do to when you're first starting!), wholesale buying, and flipping houses. Specific topics I need help with are: should I look into majoring in business as related to real estate (perhaps getting an MBA) or is this a waste of time, when should I try to buy my first property (as in how much money should I be looking to spend), what type of property would be best (apartment building for rent, SFH, wholesale, etc), what banks would be best to get a loan from should I need one, business and real estate books/ebooks I should read, and the pitfalls/rookie mistakes beginners make.

After a little reading here and there, I figured my best plan is to save up while I'm in college and then buy a 2-3 flat, live in one apartment, and rent out the rest so my tenants essentially pay the mortgage. While that sounds easy enough, that doesn't leave much net profit! Is this even a feasible option for a kid straight out of college? How do I maximize my profit and work towards a 6-figure "salary" by the time I'm 30? I have so many questions! 

I know I must seem like I'm moving too fast for my age but I don't want to be a person who goes to college, gets a degree, graduates, and then goes, "Well, now what?" I want to have a PLAN and know what I'm going to do so that I can have a comfortable lifestyle as soon as possible. From what I've heard, debt is the worst!

Please respond, anything helps!!

[Rita Medeiros]

Noelle you are on the right track. Your insight is demonstrated by the questions that you ask. You will be a millionaire by age 30. Continue to immerse yourself in education, listen to every podcast with supplemental reading. You will know if college is right for you as you get closer, but you are a rock star!

[Noelle Robinson]

Originally posted by @Rita Medeiros:

Noelle you are on the right track. Your insight is demonstrated by the questions that you ask. You will be a millionaire by age 30. Continue to immerse yourself in education, listen to every podcast with supplemental reading. You will know if college is right for you as you get closer, but you are a rock star!

 Thank you so much!!!! I appreciate your supportive words! I’m going to college this year (graduating HS early) so it’s imperative I make these choices for my future as soon as possible. I’m intimidated, to say the least, but sooooo excited!

[Carlos Zappatos]

Go to college, it’s not required to be a real estate investor but you will learn fundamental business concepts that will be invaluable for your future. Also, a business related degree will most definitely help you find a job which you can use to save money to invest in real estate. You may also want to get your real estate license as you can sell houses or at least learn while in school. 

[Jay Hinrichs]

I would intern at what ever real estate companies your interested in.

My daughter was interested in finance.. and she interned during collage with a high level appraisal company that did apprasing for emanate domain cases.. and she worked on the one in Napa CA were the state and city bought out a big swatch of the napa river for flood control project and many business had to be relocated from hotel to shopping center to car dealer all of them needed to be valued.. it was high level work she enjoyed it.

she then went on to graduate top of her class at Davis CA.. in managerial economics degree and promptly got snapped up my Intel after offers from Apple and Micro soft.

now 14 years later she is a SEnior controller and a Dave Ramsey disciple which means at her age home just about paid for 2 kids in grade school and NO debt and a ton of savings and max's out her 401k.. she has little interest in real estate she owns one rental but only rents it to family.

that was her path.  

[Manning Watkins]

Hey it warms my heart to see and young person taking a interest in business at a early age..... feel free to contact and I can answer any questions you my have

[Ronan M.]

"I figured my best plan is to save up while I'm in college and then buy a 2-3 flat, live in one apartment, and rent out the rest so my tenants essentially pay the mortgage" 

YES. Good plan. Do that.

Also when you are in college go work part time for a Property Management Company. You will learn a LOT about land lording real fast in a position like that.  You will learn a lot of the do's and don'ts BEFORE you own a property which would be of great benefit.

Then, when you are old enough get your RE License and do that.. even part time.

Follow a path like that and by the time you are 25 you will have tons of great industry experience and be well on your way to success. 

[Seth Nadreau]

Hi Noelle! Awesome to hear you have a path, some drive and some realistic expectations. 

As for education, my honest reply would be to go to school for whatever makes you happy (whatever you might want to do for additional income). An MBA is not bad, if you want it and if it helps you. If it doesn't help you, then you're really just starting your investment career in tons of debt.

I find, in most cases, a good mentor or investment group can provide so much more real world experience than many college courses can... so if you're going to spend the money, do it on a field that interests you... because you can be an investor AND be a doctor, lawyer, realtor, burger flipper, etc. The end goal is income and net worth, so make sure you start that off right. 

I regret not stepping for in college until I was 33... but I own an appraisal company now, have a broker's license and mentor realtors and entry investors. I went the cheap route, and it paid off... eventually.

From my outside perspective, the MOST important thing you can do, is save money. If you want to buy a multi-unit property, many lenders will require 20% down. Sure, there are programs and sharks... but a good down payment will decrease total expenses over time and lead to higher (and faster) returns.

Congrats and good luck!

[Noelle Robinson]

@Carlos Zappatos Yeah, I probably wont get the masters but a business degree is my goal, it definitely couldn't hurt! Thank you

@Jay Hinrichs Your daughter is a very smart, savvy girl, I know you must be proud. I don't know if that's a route I'd look into since my dad is already into real estate and intends to hand down the ~family business~ to me when I'm of age, I just need to know the ins and out of it all before I jump in, that's why I want to rent some properties of my own and perhaps do a flip or two before he passes the torch. Thank you so much for your valuable input.

@Manning Watkins Thank you very much! I just might take you up on that offer, I'm quite the newbie so I'll take all the help I can get haha

@Ronan M. Thank you!!! This is gold! I know an important part of learning any new venture is to be well acquainted with the do's and don'ts so that I don't make a (perhaps costly) mistake! This information is greatly appreciated and I will look into property management companies and getting my license! Again, thank you so much, your comment was very encouraging!

@Seth Nadreau Honestly, I have talent at several things but real estate really has my interest, and I know it's very profitable in the long run. I looked into other jobs and though I enjoy some of them, I like them as hobbies, not as a career. Also, with my dad already owning a little flipping company, I know he has many valuable connections. But, it'd be funny to be a minimum wage burger flipper who owns tens of properties though! Hah, can you imagine? What a laugh! :) Thank you for your insight, it's greatly appreciated!

[Ben Zimmerman]

If I were to recommend one book, it would be Rich dad, Poor dad.  While not specifically a real estate book, it teaches you how to shift your viewpoint when it comes to money and the importance of investing.  If you start with a solid plan when you are 18, then it is extremely possible that you will be financially independent by the time you turn 30, if not sooner.

My advise would be to get a job now and save whatever money you can while you still live at home and have no bills. When you turn 18 and leave for college, use an FHA loan at 3.5% down payment to purchase a decent sized house close to campus (preferably 4+ bedrooms). Rent these additional rooms out to other college students and create a mini sorority of your own! If you can find decent roommates, then there is nothing better than having your friends pay to live with you. With three other rooms rented, you should find yourself not only living for free, but also turning a profit in a fun and enjoyable way.

When selecting roommates, keep in mind that it's possible that not everyone plans on living there year around, and will travel back home during the summer months.  Make sure you know this in advance so you can budget for possible vacancies during the summer.  Also, while college can be a lot of fun, and house parties are amazing, make sure the roommates you pick know that house parties are more fun when it's in someone else's house!  Nothing worse than having a bunch of drunk people you barely know destroy your house.

Other than that, I would suggest trying to tap your existing resources, namely your dad for more information.  Get a part time job helping your dad renovate his flips, help him evaluate new potential deals, drive around town looking at properties for him, literally do anything that you can to help (and preferably get paid while your at it).  It's possible that after you help him for awhile that you realize you really like / dislike certain parts of the job and find out that this job is perfect for you, or that maybe you weren't cut out for it after all.  

[Chris Szepessy]

You seem very intelligent/mature for 16. I'm sure you'll get where you wanna be by the time you're 30, if not before.  For the time being, read, study, research, etc. all you can and start saving money.  I'd try to convince your dad to teach you more now.  College isn't for everyone and if you can get started investing without going to college and being thousands of dollars in debt, that may be a better option.  Like others have said...intern (or get a part time job) at RE offices or property management companies to get a better understanding of how everything works.  

[Ola Dantis]

@Noelle Robinson WHAT?!!! You are 16?!!!! I'm so jealous! I wish I knew about Real Estate when I was 16 😮😮😮 

Answers to your questions:

1. Should I look into majoring in business as related to real estate (perhaps getting an MBA) or is this a waste of time:
   • University is not a waste of time, absolutely not, many people say that degrees can be a waste of time, but I don't necessarily agree with that because it really depends on what you go to school for. For instance, if you get a degree in Real Estate and an MBA in Real Estate & Entrepreneurship, and with the kind of passion you already have, you'll probably achieve a lot as a developer before you turn 30. Going to a great university does something to your brain: critical thinking and just the way you see the world and decipher life. FACT!
2. What type of property would be best:
   • I'd say start small only because you are still young, so perhaps intern with a really awesome wholesaler in your area or find one that is exceptional somewhere in the country and be their virtual assistant (scrubbing their lists or doing online marketing for them] 
3. What banks would be best to get a loan from should I need one:
   • I won't worry about the banks just yet, focus on building your foundations and in the process, you'll get a good lender while on the journey to success
4. Business and real estate books/ebooks I should read:
   • MUST buy a hard copy of Rich Dad Poor Dad & buy the CashFlow board game [find a friend of yours who likes a challenge and play the CashFlow game with them-they might be a potential partner in your business in the nearest future] 
5. Pitfalls/rookie mistakes beginners make:
   
   • Make a ton of mistakes!-Break stuff and move fast! Who cares. Now, you must make sure you learn a lot from your mistakes and never make them twice. The goal isn't to avoid mistakes, but to learn from it. [Believe me, you will make mistakes, as real estate investing is not a flawless game]. Game is an important term to remember. 

General Thoughts:

Your dad is probably shielding you from the Real Estate Investing world, which can be, how do I say it?!, weird, like people can be very weird when it comes to money [sharing money and making money]. Like weird, you've never experienced in your 16 years of being alive, but don't be scared, you will be able to handle it and learn from those experiences when the time comes. 

I love your house hacking idea while in college, try buying a 4-unit building instead!

I will be more than happy to answer all your questions! I wish someone did that for me when I was 16. I will probably be somewhere in Asia or Africa building sustainable homes for the poor because I would have made some serious millions while in my twenties. 

Hope this helps a bit, Noelle. Goodluck, and I'm sure you'll do great! Thanks! - Ola 

[Karen Margrave]

@Noelle Robinson WOW! What an intelligent young lady you are. I have no doubt you will do well in life no matter what you decide to do. Getting an education is never a bad idea, as it helps open doors, and gives you valuable information. There are so many majors that you can do related to real estate, such as Construction Project Management, Accounting, Finance, Law, etc. All of those things have value in real estate investing. 

Your idea of getting a place and renting space while in college is a good one, depending on the demand near the college you decide to attend. However; if the college is close to your parents home, and you can remain living at home, you might want to do that. I have  3 granddaughters finishing up or in process of getting  their BA/MA degrees, one works in a dentists office,  another is a manager at McDonalds (both of them live at home with parents)  and the 3rd works at Home Depot and moved out to rent a room closer to her school. The two living at home have saved up $30,000 and $10,000 (one is close to graduating the other just started) They have received grants and scholarships, and taken out no student loans. The 3rd one has had to spend all her income on rent, eating out, etc. Big difference. All of them drive newer cars. 

[Tom Ott]

Originally posted by @Noelle Robinson:

Hi, I'm Noelle, I'm from Chicago and currently reside here, and I'm 16. My dad piqued my interest in real estate since he rents buildings and does flips here and there, however he's not very....willing to share his expertise with me until I'm in/out of college since he doesn't want me relaying any information to my mother. It's a whole thing. I'm here because I'd like to learn more about real estate (especially what do to when you're first starting!), wholesale buying, and flipping houses. Specific topics I need help with are: should I look into majoring in business as related to real estate (perhaps getting an MBA) or is this a waste of time, when should I try to buy my first property (as in how much money should I be looking to spend), what type of property would be best (apartment building for rent, SFH, wholesale, etc), what banks would be best to get a loan from should I need one, business and real estate books/ebooks I should read, and the pitfalls/rookie mistakes beginners make.

After a little reading here and there, I figured my best plan is to save up while I'm in college and then buy a 2-3 flat, live in one apartment, and rent out the rest so my tenants essentially pay the mortgage. While that sounds easy enough, that doesn't leave much net profit! Is this even a feasible option for a kid straight out of college? How do I maximize my profit and work towards a 6-figure "salary" by the time I'm 30? I have so many questions! 

I know I must seem like I'm moving too fast for my age but I don't want to be a person who goes to college, gets a degree, graduates, and then goes, "Well, now what?" I want to have a PLAN and know what I'm going to do so that I can have a comfortable lifestyle as soon as possible. From what I've heard, debt is the worst!

Please respond, anything helps!!

 I wish this is what I was thinking about when I was 16! You are on the right track! Good luck to you! 

[Drake Espenlaub]

What a thought for a 16 year old! Awesome, not sure if anyone has said this yet and it may be common knowledge, my advice is to build your credit as soon as possible. Don't bury yourself in debt, but make sure you are utilizing credit and paying it off showing the ability to do so will help you in your path to purchase your first property. A lot of problems with first time home buyers are they do not have the credit to make the purchase.  A lot of times it is not the score but the history, just be mindful but at the same time not shy about using and always keeping credit paid down or off.  Student loan debt is a large crutch. Although college is great make sure it is being paid for in other ways than loans. 

It is hard to say where the market will be in 2-4 years when you are ready to make your first purchase. If all stays the same (which is likely will not) look to take advantage of first time buyer hud homes. I would not do a flip for your first investment, get your feet wet with a stable rental that maybe needs some updating you can do to "learn the ropes". If the first time home buyer advantages stay in place utilize those to your advantage. Be it homepath or other foreclosures that offer to only first time buyers. 

Like others said I think the main thing is that you are inquisitive now, shows you will likely make it somewhere, good luck!

[Bradford Clark]

Try not to get too far in debt in college. Getting a part time job at an apartment management company can show you the basics. Get your real estate license after high school. Hope these are somewhat helpful. Good luck

[Ian Walsh]

Learn your market and learn to market would be your first step.  It would probably also help to see if you can intern for  a local successful investor that runs a solid operation.  You would have to work to find the real players because when you are new, most people that aren't really good investors will make themselves appear to be.  There is no 'best' kind of property as all strategies work.  An MBA can't hurt you but for your average investor it doesn't have a large impact in most cases.  Pitfalls - Most beginners buy too high.

[Ola Dantis]

@Noelle Robinson Oh I forgot, try to get a real estate license as quickly as you can. If you super determined you can general contractor license too. 

[Jay Hinrichs]

Originally posted by @Noelle Robinson:

@Carlos Zappatos Yeah, I probably wont get the masters but a business degree is my goal, it definitely couldn't hurt! Thank you

@Jay Hinrichs Your daughter is a very smart, savvy girl, I know you must be proud. I don't know if that's a route I'd look into since my dad is already into real estate and intends to hand down the ~family business~ to me when I'm of age, I just need to know the ins and out of it all before I jump in, that's why I want to rent some properties of my own and perhaps do a flip or two before he passes the torch. Thank you so much for your valuable input.

@Manning Watkins Thank you very much! I just might take you up on that offer, I'm quite the newbie so I'll take all the help I can get haha

@Ronan M. Thank you!!! This is gold! I know an important part of learning any new venture is to be well acquainted with the do's and don'ts so that I don't make a (perhaps costly) mistake! This information is greatly appreciated and I will look into property management companies and getting my license! Again, thank you so much, your comment was very encouraging!

@Seth Nadreau Honestly, I have talent at several things but real estate really has my interest, and I know it's very profitable in the long run. I looked into other jobs and though I enjoy some of them, I like them as hobbies, not as a career. Also, with my dad already owning a little flipping company, I know he has many valuable connections. But, it'd be funny to be a minimum wage burger flipper who owns tens of properties though! Hah, can you imagine? What a laugh! :) Thank you for your insight, it's greatly appreciated!

Ok if its a landlording company your going to get go intern at a large PM company learn it from the ground up to see if you even like it. 

[Catherine Wilson]

Originally posted by @Ben Zimmerman:

If I were to recommend one book, it would be Rich dad, Poor dad.  While not specifically a real estate book, it teaches you how to shift your viewpoint when it comes to money and the importance of investing.  If you start with a solid plan when you are 18, then it is extremely possible that you will be financially independent by the time you turn 30, if not sooner.

My advise would be to get a job now and save whatever money you can while you still live at home and have no bills. When you turn 18 and leave for college, use an FHA loan at 3.5% down payment to purchase a decent sized house close to campus (preferably 4+ bedrooms). Rent these additional rooms out to other college students and create a mini sorority of your own! If you can find decent roommates, then there is nothing better than having your friends pay to live with you. With three other rooms rented, you should find yourself not only living for free, but also turning a profit in a fun and enjoyable way.

When selecting roommates, keep in mind that it's possible that not everyone plans on living there year around, and will travel back home during the summer months.  Make sure you know this in advance so you can budget for possible vacancies during the summer.  Also, while college can be a lot of fun, and house parties are amazing, make sure the roommates you pick know that house parties are more fun when it's in someone else's house!  Nothing worse than having a bunch of drunk people you barely know destroy your house.

Other than that, I would suggest trying to tap your existing resources, namely your dad for more information.  Get a part time job helping your dad renovate his flips, help him evaluate new potential deals, drive around town looking at properties for him, literally do anything that you can to help (and preferably get paid while your at it).  It's possible that after you help him for awhile that you realize you really like / dislike certain parts of the job and find out that this job is perfect for you, or that maybe you weren't cut out for it after all.  

 I love this idea! Where were you when I was in college?? Great advice!

[Grant Rothenburger]

@Noelle Robinson Maybe others have said it already but I love your strategy and mindset. I agree that a 2-3 unit is a great first purchase. One thing you can do to speed up your progress towards a 6-figure salary by age 30 is to not only house hack the 2-3 unit, but also BRRRR it. There is a ton of information on BP about BRRRR-ing.

And IMO college is not necessary/needed, or even desired to be a successful real estate investor. But if you have a career in mind that requires college and want to do real estate part time on the side, I get that. You can learn more on here, local meetups, and finding a mentor, than college could teach you about real estate investing. I'm not trying to talk you out of college by any means, just stating my opinion on the matter.

Lastly, bad debt is the worst. Not all debt is bad debt.