New to Real Estate · Louisville, KY · Member since 2019 · 127 posts · 86 votes
Hey guys! Just thought I would throw this out there and see if anyone has advice for me, I am VERY fascinated by house-hacking, and have been watching / listening / reading everything I can about it for multiple years now (I am only 20, so that is pretty much all of my adult life thus far). However, because I am in school, I obviously don't have enough time to make an income that would even begin to approve me for a loan on a house, especially in the area of my school (Boulder / Denver, CO). But I would rather not spend my time in school just waiting to be out so that I can begin working and start investing in real estate, because all signs seem to tell me that the earlier you can get started, the more it pays off down the line. Does anyone have recommendations on what I can be doing while in school for 2+ more years?
Any advice is appreciated, and obviously I still have a lot to learn before I actually begin investing.
Attorney · Akron, OH · Member since 2016 · 535 posts · 389 votes
6y
Since you're looking at a two-year period that will likely be 'inactive' with respect to real estate, you should discover what kind of investment strategy you're interested in. If you're interested in buying and holding or flipping, perhaps you should jump on a contractor's crew to learn some basic rehab skills. Those skills will be useful in either of those strategies but will also be useful in your personal life.
Beyond that, perhaps you should consider an internship with a real estate agent or property management company. I know on a lot of occasions that property management companies that manage school rentals give out free rent to their employees. That's a pretty good deal because you can minimize your expenses while on limited income while also learning how to manage properties.
In the meantime, you should definitely link up with your local Real Estate Investors Association meetup as well as any BiggerPockets meetup. Networking is something you want to do so you can ease different kinds of burdens down the line. One issue that folks have, for example, is finding a reliable contractor. However, if you're able to network with folks that have been in the business, you'll be able to extend your network to include reliable sources. Good luck with your schooling.
Realtor · Portland, OR · Member since 2017 · 357 posts · 259 votes
6y
@Isaac Pyle Having a "non-occupant co-borrower" is a great way to qualify for financing. I work with a lot of college students who are looking to house hack and have no way of qualifying because they don't have any income. What they need is an "investor" (often times parent(s)) to help them qualify.
When I was working in corporate America I was in the same situation as you. What I did was write a business plan and presented it to my "investors". It laid out my strategy (which was to house hack) and all the benefits of it. Because I was serious enough to take the time to write out a business plan I found investors willing to co-sign on the loan. Unfortunately, the company I was with downsized, I was a cog in the corporate wheel and lost my job, and it didn't work out back then to purchase.
Fast-forward to now, what I've done is turned that business plan into a template that I give out to clients who are looking to house hack but have no way of qualifying on their own. They just fill in their info where applicable and can send it out.
New to Real Estate · Louisville, KY · Member since 2019 · 127 posts · 86 votes
6y
@Chace Fraser That is a great idea! I would love to see that business plan! I am also curious, you called it a "co-borrower", is that different than a co-signer?
I will have to figure out my own sort of personalized business plan. This is a great idea, thanks!
Whitehouse, TX · Member since 2017 · 159 posts · 61 votes
6y
@Isaac Pyle hey man there is so much you can be doing now! But first thing I want to say is congratulations on finding and catching the bug of real estate investing. In my opinion one of the best ways to change your future. The first thing is to get a plan together. Write down your goals and how you plan to make it into reality. Start hustling and grinding, don’t waste a moment of your time. I know the majority of your time is focused on school but the spare time use it to get closer to your goals. If you say you don’t have time make time. When your sitting on the couch watching you tube or playing COD use that time in a way that it is helping you get closer to the goal. Read a book about house hacking or on your walk or ride to school use your time to listen to a pod cast. On a spare weekend pick up some odd jobs to start saving for that place. Stay up later and wake up earlier, you don’t need 8 hrs of sleep! The biggest thing you can do is never give up! It may not happen in 2 years or 10 but if you keep persevering it will happen one day!! The best of luck to you!
New to Real Estate · Louisville, KY · Member since 2019 · 127 posts · 86 votes
6y
@Thomas Weidner thanks Thomas! Very inspiring words. You are definitely right in the fact that I can make time, when I said I had little to no time I was referring to working part time, which would require many hours a day that is hard to commit to. But that doesn’t mean I have no free time at all, and I plan to use that time to learn more about real estate. Thanks again!
Good to hear about other college kids trying to enter the world of Realestate investing. I too am 20 years old currently going to school with about 1 year left until graduation. I've learned that there is a lot you can do if you get creative. My advice is to get a decent part time job and begin talking to people and learning as much as you can about the business. Even if you may not be able to qualify for a conventional loan, if you look around there may be other ways to begin.
I have been asking myself the same question for the past two years, how can a broke college kid get started in Realestate? Entering my Sophomore year of school, I decided the least I could do was get the highest paying part-time job I could find (bartending) and begin growing my knowledge on Realestate investing. After a year of saving, I was able to close on a single-family property through seller financing and I had enough capital saved to fund the required renovation myself. Fast-forward to now, the remodel is over with and I have had the property rented out for a couple months now.
Long story short, now is the best time for you to begin. Begin learning and begin networking. Then move onto the next step and take action. Now is a great time to take on risk and make things happen. Good Luck!
Investor · Member since 2019 · 21 posts · 15 votes
6y
I would agree with some of the comments in this thread. Make sure that you are preparing your credit profile, work history (W2), and saving for a down payment. Researching where you would want to settle down at would also be helpful. Find a mentor that you can learn from as well. Mentors are so valuable.
Well that all depends on whether the degree you are pursuing is going to pay out or not. Have to start there! And noayter how little money you have, there's a deal out there. Just a matter of finding it!
Real Estate Agent · Westboro, MA · Member since 2016 · 1k+ posts · 471 votes
6y
@Isaac Pyle Keep learning! At your age, thats incredible you are already looking into your future. Continue to save money and decrease your expenses as much as possible. You can also begin to learn about the markets you are interested in
Investor · Middlesex, NJ · Member since 2016 · 21 posts · 12 votes
6y
@Isaac Pyle
You should be reading and try to educate yourself as much as you can in the next two years. Also make sure to network and to meet as many investors or others that are into real estate! You never know what kind of opportunities other people may bring so always make sure to tell others that you are passionate about real estate!
Investor · Indianapolis, IN · Member since 2019 · 53 posts · 62 votes
6y
As a fellow 20 year old and full-time college student, all I can say is nothing is out of reach. There are ways to get creative with REI, and get deals under your belt. All it takes is initiative and massive action to see true results, this will set you aside from the 'tire kickers.' Build a foundation early on, and don't let college hold you back!
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
6y
@Isaac Pyle I'm pretty sure they pull your credit and anyone else's if they co-sign on the loan. I noticed you mentioned 401K FHA loan. I would do more research on that type of loan. It's a NIGHTMARE from what I've read on forums. When you're going through the rehab the banks pays out in draws. Some banks require approved contractors. You don't have control. Projects get stalled because people aren't paid on time, etc. I've read a few threads where a 3 month rehab took over 8. Just be smart and read the terms if you go that route.
Rental Property Investor · Member since 2018 · 2 posts · 0 votes
6y
@Isaac Pyle
It also comes down to finding the right deal. If you can find a property that the seller is willing to hold a note on for a couple years, that could give you the time you need to solidify that w2 income that the banks know and love.
Good luck and make sure to take time to appreciate college while you’re still there!
Hayward, CA · Member since 2017 · 48 posts · 55 votes
6y
Here is what I did 20 years ago as a 19 year old with no money or experience.
I learned that some of my parents longtime friends had money, so I talked to them about borrowing it (at the time 8% interest) in exchange we put a second on a property my Dad owned as security and my Mom co-signed on my first property.
At first I thought a single family house was the way to go, and even put an offer in on one which was out bid. I'm glad I didn't get it because in the following days I read Rich Dad Poor Dad and started only looking for larger unit counts. I found a fourplex and got it, house hacked one of the units for a few years. It worked so well for everyone that I did practically the same plan 4 more times over the years.
The deal structure did not make life easy though. It was a huge learning curve and I basically have every last bit of profit to everyone else for years. But now, years later, I still own all those properties, have many (but not all) of those loans paid, and am doing great.
People near retirement need steady income and if they trust you (and have some sort of guarantee against loss) their accumulated wealth can really propel you.
Specialist · Los Angeles, CA · Member since 2020 · 12 posts · 3 votes
6y
@Isaac Pyle
Invest you money in self education. Buy books, buy courses (unless you can get them for free), buy tools, buy everything you need to prepare you for when you are ready.
New to Real Estate · Louisville, KY · Member since 2019 · 127 posts · 86 votes
6y
@Ryan Rabe Congrats! That's awesome that it is working out for you right now! I still have a lot to learn, but it is cool to know that other people my age are making it happen right now.
@Ivan Guillen Very true and encouraging. I will have to look into some more creative options!
@Jaron Walling Oh interesting, I have heard mostly good things about 203k FHA loans (is that the same as the 401k you mentioned?). I will have to do a lot more research into this, clearly I do not know too much about it yet. Thank you for the update!
@Michael Nilsen That's true, I should enjoy it a bit shouldn't I? Haha!
@Account Closed That is a really cool life story! I'm happy it has worked out the way it has for you! In my market, a 3 bed 2 bath SFH in need of some work could easily go for $400k, so finding any kind of duplex or deal with more units would be somewhat out of reach.. but maybe that would work well on the second or third deal! And I love the advice about friends of family looking to do something for retirement, I will remember that, thanks!
Rental Property Investor · Ashland, KY · Member since 2019 · 16 posts · 5 votes
6y
I would like to second this. I’m only 7 years older than you, and I truly under valued the power of educating yourself. I am in college now while working full time about to finish my third college degree, and I truly feel I’ve learned more about life and business in the past 6-7 months teaching myself through self education than my almost 7 years of college have taught me. Books are cheap. Start with any bigger pockets book, and best of luck! Starting at your age you are going to rock it!!
Hey guys! Just thought I would throw this out there and see if anyone has advice for me, I am VERY fascinated by house-hacking, and have been watching / listening / reading everything I can about it for multiple years now (I am only 20, so that is pretty much all of my adult life thus far). However, because I am in school, I obviously don't have enough time to make an income that would even begin to approve me for a loan on a house, especially in the area of my school (Boulder / Denver, CO). But I would rather not spend my time in school just waiting to be out so that I can begin working and start investing in real estate, because all signs seem to tell me that the earlier you can get started, the more it pays off down the line. Does anyone have recommendations on what I can be doing while in school for 2+ more years?
Any advice is appreciated, and obviously I still have a lot to learn before I actually begin investing.
Thanks in advance!
- Isaac
This is time when you'll want to be learning as much as you can about REI.
Something that can help you go beyond the average investor is learning about obtaining funding for your deals. Another key skill is marketing for deals, marketing your deals and marketing your services as an investor. So, marketing and fund-raising are key areas on which to focus.
Fund raising is not what you might think. You're probably thinking banks and other traditional lenders who look at your income and credit before they even consider looking at the deal, if they look at it at all.
There are sources of funding where the deal matters more than your earnings, track record or credit. You'll want to learn about self-directed retirement accounts and other holdings of people who want solid returns but who also want someone else to do the leg-work. Older workers, professionals with high income (doctors, lawyers, executives, etc.) and retirees are the folks who will be interested in what you have to say once you learn what to present to them and how to present it.
New to Real Estate · Louisville, KY · Member since 2019 · 127 posts · 86 votes
6y
@David Dachtera Wow, this is really great advice. I have a lot to learn about marketing myself to others, and about fund raising. This is definitely a push in the right direction for future research, thank you!
@Jaxton Holmes Great advice! I haven't looked into courses yet just because there is so much free information to be had still. Maybe down the line..
The caveat about "free" information is, as you might expect, "you get what you pay for".
Never hesitate to invest in your own education. Education doesn't cost - lack of education costs.
If you think education is expensive try doing without it. Listen to the BP podcasters talk about how much money they lost on their early deals from not knowing how to make better choices, better decisions. Most of them could have paid for their education a number of times with the money they lost.
The major caveat about education is never waste money with the "gurus". The FTC just closed a bunch of 'em down for fraud and deceptive practices.
There is education to be had - solid education with no "gurus" and no BS.
New to Real Estate · Livingston, TX · Member since 2020 · 12 posts · 4 votes
6y
@Isaac Pyle There is a lot of solid advice already, and I agree with the majority - read and learn everything you can for sure. But don’t think for a moment that BP is the only resource you can use. I have spent a wealth of time on YouTube (yes there is a BiggerPockets channel) and have learned a great deal.
Also, I saw that someone said you’ll probably need ~$20K to get started. In fairness, I haven’t done my first deal as of yet, so this may be true and I may have wasted 2 years learning about creative real estate investing. But I don’t believe it is. I think it was Phil Pustejovsky who first separated the convention of real estate—an investor must first have a lot of money, then he can spend that lot and make more—from the truth about real estate, which is this; the more you know, the less you need.
This may not be for you, and I understand if that’s the case. But, as an unemployed college graduate of 2 years, I highly recommend it to you.
Check out Phil Pustejovsky (Hour+ video, be advised, but it’s very worth it)
https://youtu.be/lSXGxOiRp7A
Check out Kris Krohn (Focus on his “compassionate finance” videos)
https://youtu.be/GGPpZm_A964
Check out Graham Stephan (You’re probably already familiar. He is the king of penny pinchers man)
https://youtu.be/smvvTw5GhyM
https://youtu.be/ukaWAjgkH9M
No mater what you decide, best of luck to you Isaac!
Rental Property Investor · Salado, TX · Member since 2019 · 6 posts · 4 votes
6y
@Daniel Haberkost
100% agree, maybe even look into a real estate license. If you want one someday this could be the time. I know someone that did it in college and worked great for him.