19 | 5k | Good Credit - Where do I start?

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19 | 5k | Good Credit - Where do I start?

Christopher Raiz
Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes

I’m 19, I have 5k saved, credit built for nearly a year and I’m eager to get into the real estate business but I don’t know where to exactly start. I know people say to just jump in otherwise all the knowledge I’ve learned is useless without action, but the farthest guidance I have is reading books on all the different types of investing into real estate lease options, flipping, the step-by-steps, and the mindset.

I have a couple connections to a few real estate agents that have been successful in their craft (one is the top real estate agent in their company they work for and the others are entrepreneurs) and have yet to discuss with them but I just would like to know if anyone has any helpful advice for someone who has absolutely no experience of being out in the field.

Do I get a mentor? Do I go into it by myself and learn as I go along? Will people actually purchase/rent/lease a property from somebody who is only 19? Or even common misconceptions about real estate? (One extra question, if I invest into a house and it’s not going well and I need to back out of a financing deal I’ve made with the owner of the residence will I be able to easily?)

Thank you for any responses and advice I really appreciate it.

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Pat G.
Rental Property Investor · Northville, MI · Member since 2015 · 179 posts · 92 votes
7y

@Christopher Raiz Congrats on the achievements thus far. Great advice so far. Here is what I tell people when they ask me the same question:

Step 1: What are you targeting?

  • Residential
  • Commercial

Step 2: Now narrow your focus more: Example if Residential -Wholesaling, Foreclosures, rental, Lease Options, etc.

If commercial Apartments, Billboards, Cell Towers, Tax Overages, Self-storage, Mobile Home Parks, Etc.

Step 3: Go on iTunes and listen to all relevant podcast for your interest.

Step 4: What State(s)?

Step 5: What areas in that state (s)?

Step 6: Write it down - Example I do residential foreclosures in the Southeastern Michigan cities of Allen Park, Ferndale and Royal Oak. 

Step 7: Tell everyone you know or run into what you do.

Hope that helps and good luck. One more thing - don't be afraid to fail! 

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  • Paul Stewart
    Specialist · Atlantic City NJ · Member since 2018 · 115 posts · 50 votes
    7y

    Hey

    So for starters Good for you! At your age what a great time to start...So obviously I would suggest to keep gaining knowledge and reading as you can never learn to much. Do you work a full time job? what type of Income do you have and how long. It will be hard to get a lender to lend to someone with not much work history or history of Income in general. My suggestion overall is just dig deeper and deeper as far learning..maybe try to meet some local investors and ask them if they need help with their properties and that way you can build a relationship that can turn into a mentorship and with that so much more. The amount of action you can take between your age and 5k is very limited but you can start to build a foundation for a future in REI. Have you tried to speak to a Mortgage broker at all?

    7Reply
  • Jamie Keller
    Tacoma, WA · Member since 2018 · 2 posts · 4 votes
    7y

    Following for same advice.

    4Reply
  • Kevin Wang
    Real Estate Agent · Plano, TX · Member since 2013 · 106 posts · 54 votes
    7y
    Woah! Slow down young grasshopper. I know the excitement can be overwhelming when you're given with so many paths to take and so many options to choose from. When I was your age I had no idea what to do! I collected all these books and PDF files and when it was time I did not have much use for them. You're right that hands on can be one of the most invaluable experience you can receive. But down the line I had to shell out of money for my mistake. Yes, you can own a million, billion,gigabyte, ..etc.. (leasing, purchase) etc and it won't matter what age you are So the choice you make is now. You can keep reading books or be the Agents boss and sit on your high chair.
    2Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Paul Stewart Thank you for your advice! I do work full time currently at a law firm as well as college as a part time student. I’ve been working there for about 2 years and make about 2k a month. Also where would be the best places to search for local investors? The connections I have are through personal connections. Lastly I have not met with a mortgage broker.

    0Reply
  • Pat G.
    Rental Property Investor · Northville, MI · Member since 2015 · 179 posts · 92 votes
    7y

    @Christopher Raiz Congrats on the achievements thus far. Great advice so far. Here is what I tell people when they ask me the same question:

    Step 1: What are you targeting?

    • Residential
    • Commercial

    Step 2: Now narrow your focus more: Example if Residential -Wholesaling, Foreclosures, rental, Lease Options, etc.

    If commercial Apartments, Billboards, Cell Towers, Tax Overages, Self-storage, Mobile Home Parks, Etc.

    Step 3: Go on iTunes and listen to all relevant podcast for your interest.

    Step 4: What State(s)?

    Step 5: What areas in that state (s)?

    Step 6: Write it down - Example I do residential foreclosures in the Southeastern Michigan cities of Allen Park, Ferndale and Royal Oak. 

    Step 7: Tell everyone you know or run into what you do.

    Hope that helps and good luck. One more thing - don't be afraid to fail! 

    11Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Pat G. Thank you for replying and your advice! 

    1.My target would probably be residential to start off with, commercial I haven't done much digging into and will research into it to become more familiar with what is a near possibility in that target area but residential to begin with and commercial real estate down the road was my plan.

    2. I was thinking about Lease Options for beginning, if you have any advice on lease options it'd be much appreciated or if you have recommendations for another focus for beginning that would be great!

    3. Got it, useful tip! Thanks!

    4. To begin I was going to start in IL and eventually spread out to bordering states.

    5. In Illinois I would be looking around the Aurora/Oswego/Naperville area.

    6 & 7. Gotcha, thank you for everything that you've taught me and I really do appreciate it if there's any other advice or tips that you know I'd love to hear!

    0Reply
  • Anastasia G.
    Lender · NJ NY PA CT GA FL, Puerto Rico · Member since 2015 · 213 posts · 111 votes
    7y

    @Christopher Raiz 19! God bless you Youngsta! :) get a real estate license and keep saving/learning! You can get a job with real estate investment company as well - earn and learn:)

    10Reply
  • Pat G.
    Rental Property Investor · Northville, MI · Member since 2015 · 179 posts · 92 votes
    7y

    @Christopher Raiz You are welcome. I have a lot of experience with Lease with Option to purchase here in MI. I owned about 100 of them at one point. And with that you are going to be dong the Pretty House business, by that I mean those areas in IL you named are nice middle class areas and when you do the Pretty House model you don't have to do any repairs to them. I learned the business from the God Father of Real Estate Ron LeGrand (ronlegrand.com) and then there was Charlie and Randy France and Bob Meister have a Subject To course that is really good, they are in Indiana. You can Google them for their website. Learn on you can and good luck.

    4Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Anastasia G. Thank you! I'll make sure to get my license ASAP!

    1Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Pat G. That's wild to imagine having 100 properties at one time but that's the goal! I live in the area so I was trying to keep it close in case anything comes up at some point it's not too far of a drive and easier to manage if needed to. I'll definitely look into their websites and learn what I can from them, thank you for all your advice! Can't wait to begin my journey!

    0Reply
  • Gage Rowden
    Rental Property Investor · Boca Raton, FL · Member since 2016 · 17 posts · 7 votes
    7y

    A suggestion I have is that you could potential invest in Cardone Capital. They have recently accepted $5k investments I believe. 

    While real estate is pretty simple it also has some risk. Since you stated you don't know what quite to do yet. Keep building up credit, increase the money flow, and find what part of real estate you are passionate about then learn about it. Is it wholesaling? Flipping? Investing in apartments? Notes? Etc etc. Best to learn and increase your cash first. But if you want to start getting passive income whole you are learning and creating more cash you should take a look in Cardone Capital that pays monthly. 

    Best!

    2Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Gage Rowden That sounds great! I haven’t heard about that before but I’m definitely interested. A perfect way to start increasing cash flow to be able to proceed with my first purchase!

    Thank you a lot for the idea, it’s just what I needed!

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Anastasia G.:

    @Christopher Raiz 19! God bless you Youngsta! :) get a real estate license and keep saving/learning! You can get a job with real estate investment company as well - earn and learn:)

     Yup if you want in the business get in the business I got my license at 18 many moons ago and never looked back.

    was not always a bed of roses but you cant believe the connections you can get being an agent.. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    2Reply
  • Gage Rowden
    Rental Property Investor · Boca Raton, FL · Member since 2016 · 17 posts · 7 votes
    7y
    Originally posted by @Christopher Raiz:

    @Gage Rowden That sounds great! I haven’t heard about that before but I’m definitely interested. A perfect way to start increasing cash flow to be able to proceed with my first purchase!

    Thank you a lot for the idea, it’s just what I needed!

    No problem glad to help and best of luck to you moving forward

    0Reply
  • Charlotte Harrison
    Flipper/Rehabber · Member since 2019 · 11 posts · 2 votes
    7y

    @Pat G.

    Hi Pat

    You just might be the person that I’ve been praying to bump into. I have a little money and a property in the “D”. ( was 2 of them but actually going to closing tomorrow as I’m selling one). I would so love to converse with you about possible next moves in Detroit or even other areas of Michigan. Would you mind terribly to have a private convo with me? Would mean the world to me

    0Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Jay Hinrichs 

    I'll keep that in mind when out in the field! Been trying to figure out a good way to be able to gather connections from each field of work involving real estate on a personal level and this certainly sounds like one of the best! 

    Thank you!

    1Reply
  • Aaron Millis
    Rental Property Investor · Montgomery, AL · Member since 2016 · 179 posts · 188 votes
    7y

    You can't control how old that you are but you can control how mature/professional you are. I'd say you are at an advantage being only 19 and already having discovered something that could potentially be life changing for you. I started at 24, I'm 26 now and I have already had a great amount of success via real estate, and I'm not a real estate expert. 99% of what I know about REI I learned right here on BiggerPockets in the form of books, podcasts, and forums. I guess my advice might not carry as much weight as others who have been investing for decades.. but I'm wayyyyy against spending money on "Coaches" or "Mentors". All you need is information and action. You're in the right place for information so all you need to do is figure out how to take action. The forums are amazing because you can ask 1 million+ people questions anytime you want. So why would you ever pay someone when people are willing to teach you for free?

    As far as which route you should take, just go for the one that is the most appealing and seems the most possible for your situation. I was going to tell you not to get discouraged if things are hard or don't go well... but I'm the kind of person that doesn't believe stuff like that needs to be said to a grown man. If you know what you want is obtainable and you know how to get it no amount of setbacks should stop you from achieving it. If they do then you never really wanted it.

    This is coming from someone that's done numerous random entrepreneurial things prior to discovering real estate investing and failing at a lot of them. To include getting robbed of $2000 cash when I had like $3000 to my name!  

    4Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Christopher Raiz. What’s “good” credit exactly? 720 or above score? Lower, higher? I would recommend focusing on school as you save more money and learn a lot more. I listened to 200 podcasts, read several books and probably had 2000 forum posts before I bought anything. Learning is invaluable and it’ll minimize your mistakes. 5k May have taken you a long time to save and if you don’t use it wisely you’ll run out of money quickly

    3Reply
  • Oliver Bergsjo
    Rental Property Investor · UT · Member since 2018 · 7 posts · 5 votes
    7y
    @Christopher Raiz I started at 19 also! I had a bit more of a nest egg saved up and I started the house hacking method. My tenants don't know my age because it doesn't matter! Feel free to connect you're on the right path!
    1Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Aaron Millis Thank you for the motivation! 

    I agree now from just this one forum post I can learn so much from BiggerPockets and the community that runs it. People like you and everyone else on this forum post are in a way mentoring me or coaching me on how to go about this properly and for that I'm very grateful. Thank you for your motivation and advice! 

    Wish you the best.

    1Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Caleb Heimsoth  

    I currently have 719 on TransUnion and a 705 of Equifax and rising.

    I do agree 5k won't even last me half a year if I were to recklessly spend it, do you have any recommendations as to what I could possibly invest it into? Or if I should keep building it up to invest into something later?

    Thank you for your advice! 

    2Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y
    Originally posted by @Christopher Raiz:

    @Caleb Heimsoth  

    I currently have 719 on TransUnion and a 705 of Equifax and rising.

    I do agree 5k won't even last me half a year if I were to recklessly spend it, do you have any recommendations as to what I could possibly invest it into? Or if I should keep building it up to invest into something later?

    Thank you for your advice! 

    For 5k I would recommend a REIT. In general I would recommend saving more if you want to buy direct real estate.

    So I think it varies by bank but In general they’ll take the middle or lowest of your three scores so you’re probably around 705.  Not awful but it’ll get better in a couple years as your credit history gets longer.  

    1Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Caleb Heimsoth

    Ah, okay that sounds perfect actually for a starting point until I can compile enough money to start my first deal, and just to make sure I'm understanding this properly a REIT would be like Cardone Capital? Investing in real estate essentially as if I were getting stock in the property that would produce me passive income over a certain about of time whether the payment would be monthly or annually etc.? Do you happen to know any other REIT websites that I can browse to look for investments?

    Also, I did not know that about credit scores so thank you for informing me! I'll keep doing my best to raise it as quick as possible, it's going great so far and will hopefully only get better! In the meantime, I will keep learning about different types of real estate investments and the best way to approach different scenarios. Thank you for the advice!

    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y
    Originally posted by @Christopher Raiz:

    @Caleb Heimsoth

    Ah, okay that sounds perfect actually for a starting point until I can compile enough money to start my first deal, and just to make sure I'm understanding this properly a REIT would be like Cardone Capital? Investing in real estate essentially as if I were getting stock in the property that would produce me passive income over a certain about of time whether the payment would be monthly or annually etc.? Do you happen to know any other REIT websites that I can browse to look for investments?

    Also, I did not know that about credit scores so thank you for informing me! I'll keep doing my best to raise it as quick as possible, it's going great so far and will hopefully only get better! In the meantime, I will keep learning about different types of real estate investments and the best way to approach different scenarios. Thank you for the advice!

    Cardone capital is a syndication. This is different then a REIT. A reit is a company that must give 90 percent of its income to shareholders. I would do some research on REITs. There are different types. There are public and non publicly traded reits. The. In public ones will be very non liquid. I recommend publicly traded REIT.

    0Reply
  • Christopher Raiz
    OP
    Rental Property Investor · Aurora, IL · Member since 2018 · 36 posts · 12 votes
    7y

    @Caleb Heimsoth

    Ooh, so a REIT is a share/stock that's traded publically on a stock exchange/stock market? Would it also bring in monthly payments for the number of shares you own in the REIT like a passive income or would it be a buy/sell type of income?

    I'm reading it on | https://www.investor.gov/introduction-investing/ba... | 

    it seems like a great investment if this happens to be what your referencing. If it is, do you know somewhere that I could find a reliable broker for investing into these?

    (Also if it's not too much to ask could you explain to me what syndication is? Thanks!)

    0Reply
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