Can I invest as a college student with 15k?

Question

Hello.

I am a 3rd year college student in Los Angeles. No debt and 15k in the bank. I want to invest in real estate but I am not sure if it is possible. I do have decent credit (~750). However, I do not have a steady source of income i.e. a job. Is it possible for me to start investing in real estate or should I hang the towel here and now?

Just as a side note, I don't really have an interest in flipping homes. I am thinking rentals.

Arianne L. · Answer

@Carlos Castillo Good on you for getting started at such a young age! I wish I did!

You can start by "house hacking". At that price point where you are, I am guessing perhaps a townhouse that you can buy with 0-3% downpayment where you can live in one room and rent out the others

Aleksandrs Vilumsons · Answer

Carlos,

If anything, you can take this time to do more research and start building a network in your area. I graduated in 2015 and I am now only starting to build my network. If I had started my junior year, I would be so much farther ahead than I am right now. This doesn't only mean individuals that are in real estate right now. I think being in college gives you a unique opportunity. Many of the students that you are going to classes with now will find jobs in other parts of the country. If you can start seeing potential in future partners I would start establishing those relationships now. In college, I tried to create good relationships with people who I thought were smart, had good leadership skills, and who were good people I could trust down the road. A solid network of good and smart individuals can be an amazing tool that will help in your future investing, and in life in general.

It also sounds like you have started formulating your goals, which is very important. Understanding why you are investing will greatly increase your ability to create a business plan and help you when deciding on a strategy.

Carlos Castillo · Answer

Thanks but I live with my parents right now free of rent. I agree that it sounds like a great idea but since I dont pay rent it does not work great for me.

Jason Windholz · Answer

You don't need banks for getting lease options, subject to deals, and even cash deals funded by hard or private money. New loans are not needed to invest in real estate. Some people use them for lower interest rates, and sometimes just because they can. I did for my first few, but after that I have used hard money, private money, and/or seller's money/financing, and those are more on the deal itself, not your ability to qualify.

I would start early, I started investing in real estate at age 23, I had already bought my own homes to live in at 20 and 22 but was 23 for my first investment property. You can start at any age, but most people who do it smart (successfully) always say they wish they had started sooner.

Sam Tijerina · Answer

Living rent free is great, but you are not building equity while you are living at home. If you house hack you have someone paying your mortgage even if there is little to no cash flow you are still coming out ahead. For a person still in college, I think this is a great way to enter REI.

-You live where your wealth is being generated, so you can keep a close eye on your investment.

-You can easily rent to other students who are trying to stay away from the dorm life.

-When you graduate and start your career you will be able to marry the missing income to your existing investment.

-Lastly (as mentioned above) you will build relationships with people who move all over the country to different markets and they will know you are serious about investing should they decide to get involved as their careers progress.

I had a friend who did this and paid a significant portion of his mortgage with a nice 4 bedroom home during college. By renting each room he was able to receive more money per month than if he rented the entire house to a single tenant.

Good Luck!

Edward Rhoads · Answer

You will need to do one or more of these 3 things:

1) wholesale

2) lease option

3) buy houses in other markets such as the midwest where your 200k loan + 15k can get you 4 houses that each cash flow about $500 a month

Glenn Tracy · Answer

Hey @Carlos Castillo, I think it's great that you're looking into investing in RE at such a young age, very smart move on your part!  And it sounds like you're in a pretty good position with good credit and your parents to back you.  I think the option @Arianne L. pointed out is a great one, and I think what she forgot to mention is that you could still be living rent free, meaning your roommates would be paying your mortgage.  But another one to consider, seeing as how your max price point is $215k, is investing somewhere out of state.  And I know you mentioned you didn't like the idea of investing out of state, but a ton of investors successfully do it every day!  You just have to make sure you have the right team in place.  I have an amazing team that I just started working with in Indiana, who my business partner and I flew out to meet with in person just a few weeks ago.  So if you allow yourself to look outside of Calif., you could very well get a head start on your way to financial freedom...just my 2 cents.  But feel free to reach out and send me a message if you'd like to know more and best of luck to you, you've definitely come to the right place to network and learn as much as you can about REI.

Cabri Griffin · Answer

House hacking would be great during this time in your life. You'll earn money, learn about investing and have a lot of fun.

Carlos Castillo · Answer

My parents and I are working on a joint investment so the 200k are available. I was really not looking to make a killing here or anything but a small trickle would have been appreciated. I was looking at Rentals in San Bernardino or Fontana but nothing good so far. I am avoiding out of state for my first purchase as I would think it would be hard to manage with no prior experience.

Can I invest as a college student with 15k?

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