I’m 19 and I’ve been looking into buying as holding a rental property. should I do it? Or should I go another route like a fix and flip? Another thing to add is I don’t have the funds to buy a property, as most 19 year olds do not, how would I go about finding the funds to do so? Any advice is much appreciated.
@Chin Chico thank you I appreciate it
Orion, is it possible to see if you qualify for an FHA loan with 3.5% down? If you have some friends willing to rent some rooms that would help cover monthly costs and start to build your savings back up. Look for a place that might need a little work so you can put some sweat equity into it. Look at what you can scrape together to use as a 3.5% down payment and base your house price off of that.
Everything is possible and you're never too young to start your REI journey. If down payment is the issue, consider a partner, or a ask family and friends for a loan with a solid plan to pay them back with interest.
@Jamie Derasmo thank you so much this really helps I thought it was more than that. I appreciate you taking the time out of your day I’ll be sure to take yo advice
Hey @Orion Hernandez
Congrats to you for your ambition! I suggest you look into house hacking. Learn as much about that as you can. Bigger Pockets actually has a book on it called The House Hacking Strategy written by @Craig Curelop . If you are looking to connect with someone for some guidance or advice, feel free to reach out to me. I recommend you read this article I wrote for Bigger Pockets titled How to Invest in Real Estate Before Turning 21. Once you've read it, let me know your thoughts and if you have any questions. I am a high school teacher in Colorado and I am always looking to help young people get started in real estate investing or help in any way I can. Let me know if you want to chat sometime. https://www.biggerpockets.com/..
@Orion Hernandez There's some decent advice here, but I would say the most important thing is to ensure you have a steady source of income. An FHA (or even better, FHA 203k) is an incredible, low cost way to get started, but you need to qualify for it first. What's more, your ambition is great, but you don't want to be a 19 year old swimming in debt you can't pay off.
You'll be in a great position if you start at anytime in the next couple of years. Keep networking in real estate, but get the income side figured out first (if you haven't already).
Hi Orion! Thanks for posting your question! The one thing I might address is the ability to get a loan like an FHA 3.5% or a conventional 5% loan. To do this, build up good credit, have a work history of about 2 years, and save up enough for a down payment (and closing costs) for what you're looking for in your area.
I think more importantly though is to clarify why you want to get a buy and hold property. If you know your end goal beyond this, you might come up with creative ways to make it there than just making it a yes or no question!
As for funds, Brandon Turner wrote a book in the BP store of how to buy your first property with no or low money down, so I'd check that out.
@Dan Sheeks thank you so much Dan I really appreciate it. I will be sure to reach out to you and read the article that you wrote. Thank you again
@Dave Spooner thank you so much I appreciate it it really helps to hear this because you’re right I don’t want to be swimming in debt and I’ll be sure to look into these loans. Thank you
@Peter Pham thank you o hope to start within the next two years and I’ll be sure to look into an fha loan because it seems to be the common factor for getting started at low costs
@Orion Hernandez passive income is cool, and don't get so caught up chasing it that you forget to make huge active income!
Note that your career may be funding a big part of this upfront.
@Charlie Kimberly thank you for taking the time i appreciate it
I was in the same position 8 years ago. I wanted to get into flipping houses and buying rentals. What I did was I worked in industries that would help me get there.
I started working in the trade doing construction and plumbing on my summer and winter breaks from college. I made really good money and it taught me skills I use to this day. I do so much of the work myself and I can't even tell you how much money this saves on my rentals. It also taught how things work, how to spot shoddy craftsmanship, and the dos and don'ts when it comes to renovating rentals.
I'm not saying this is the route you need to go but this is what I did. There are many jobs and side hustles you can do! You can be a leasing agent over the summer or on the weekends, it'll perfect your people skills and you'll be a pro at listing and renting apartments. You can do property management and learn the ins and outs of running a rental property. If you decide to go to college, see if you or your parents can get an FHA loan, get a house on campus and rent out the rooms to fellow students.
These are just some good ways to make some money on the side and when you are ready to purchase something you can do so with confidence because you will have the right skillset. I think it's awesome that you are interested in investing in property at your age, and you have the right mindset. Best of luck!
@Hans Suljic thank you so much I appreciate it. I have been working construction for the past year it’ has just been on and off a lot so work hasn’t really been coming in because of the pandemic everyone’s getting sick, but what I have noticed is that it really does help because I have toured just a few fixer upper properties and it definitely helps spot what needs to get done. Thanks for taking the time to respond I appreciate it
Exactly! It's such useful knowledge to have. About a week ago I looked at a house that was for sale by owner and right away noticed an addition was added to the living room. It looked great but after some investigation, I found out it was done without a permit and not under code. When my friend bought his first house I checked it out and noticed there was a galvanized pipe mated to a copper pipe without a brass nipple. The copper pipes all had galvanized hangers and it's not the biggest deal and can be easily fixed but you have to ask yourself if they cut corners on something so small where else did they cut corners? Told him to adjust his budget (he didn't) and he bought a house full of plumbing and electrical problems. You are already learning things that will help you out.
@Hans Suljic construction is definitely the way to go if you want to learn about the literal Ins of real estate. One question just because I’ve been slightly back and forth where do you find your rentals on or off market?
@Hans Suljic also I know that plumbing roofing and electrical problems are the most costly because my employer always expresses himself immensely whenever there’s a problem with those thibgs
Hey Orion, I thinks it’s important to have a solid financial position before investing in real estate. You can buy a property at 19, but you need to have the reserves in place. I would recommend saving a good bit of money first and focusing on making more money through side hustles, jobs, wholesaling etc. Then I’d go looking for a way to do a deal with little or none of my own money so I have reserves to cover myself when things don’t go as planned. You don’t want your first deal to be your last. I bought my first property at 19, but I also have over 8 months of reserves just in case. I wouldn’t rush into it, just to say you did a deal at 19. I’d be smart about it and work towards a flip or a rental based on my own goals, strategies, and finances. Hope this helped!
@Orion Hernandez Yes! I turned 20 on Thursday and I have 2 properties under contract! I am closing on one on Tuesday to use as a rental! The other I am closing on in May to flip! I 100% believe you should start early. It looks like you wholesale, so I would continue trying to do that and close on some deals, re-invest in some marketing to close on more and set the rest aside for your first rental! Also shoot me a PM if you have any questions, I’d love to connect man!
@Orion Hernandez Good for you for knowing about RE at such a young age. I agree with some of the advice already given: have a job, save up, House hack if possible. I think you should also start by defining your goals and the lifestyle you want and then figure out what it will cost you to have that life. Then you will know what you will need to get from RE or any venture you take on. Also learn how to live on a real budget, this will eliminate so much stress from your life. You will have to decide if you are willing to make short term sacrifices such as going on vacations when your friends do, buying new car if an older one will suffice, getting pets ( no offence if you have pets). Etc... These things all cost money and time that you can put toward your goal. There is that saying that Mindy Jensen quotes “ Live like no one will now so that you can live like no one can later”. Educate your self and learn from a mentor. You have already had a couple of people here offer to have you reach out to them. Do what they ask and talk with them. Best future to you.
@Jabbar Adesada thank you so much I appreciate it I definitely understand what you mean thank for the insight and advice it was awesome
As long as there is a moratorium on evictions, do not get into the business.