I am 19 years old and am getting ready to reap the rewards of an investment I made with my business partner/bestfriend. I will have a lot of cash to invest. Although, I have really no real history of significant income. Do I need a few years of income to show, in order to get a loan & buy apartment buildings? If so, I may have to wait to buy.. But I’ve also heard around that you can use the projected income of the building I would buy to qualify for a loan. Any knowledge is great.. thanks so much!
@Lukas James - first, congratulations on being motivated and having some success at a young age. It will set the foundation for the rest of your life.
My first piece of advice is to learn learn learn until you invest a dime of your money. Even if you think you found the deal of a lifetime, don't invest until you look at at least 100 properties and run the numbers on them.
Partner with someone who has experience in this space who can show you the ropes and sounds like you may need someone to help with lender requirements anyway.
What size multi-family are you interested in? What role are you looking to play in the partnership?
@Percy N. Hi,
Thanks for your response. We will be patient and do just what you've said, walk through 100 properties and run the numbers before we consider investing. About the mentor/partner, how do you recommend we go about finding one locally?
Also, 16 units+ apartment buildings is ideal from what we've learned, and we should have the down payment, especially if we have other investors in on the deal. We have a lot to learn, which is why we have started learning a year before we plan to consider buying. As for role of partnership, what are you referring to? Thanks for your time!
Hey @Lukas James . My name is Jeffrey. My brothers, Kerwin, and I are also 19 years old. We work alongside our older brother Kenneth, who is 22 years old. We are currently in apartment syndication. It's awesome to see another young person interested in apartment syndication and commercial real estate. Feel free to DM me so we can connect!
As far as advice, for us, education and networking has been critical to our success. We've met so many people, and we are still learning everyday. We recommend finding someone who is doing the business at the moment, and find a way to bring value. This will likely be helping them raise capital, because you might lack the experience or credibility needed to get a deal. If you know brokers, or don't might cold calling them, then that might be a good long play to find your first deal. But, I recommend focusing on learning the business, and finding passive investors. Passive investors will bring money to the table, and many larger, more established syndication teams will not turn down a young person like yourself willing to learn AND bring value in the form of a pool of investors.
Hope that helps. Let me know if you want to hop on a call.
Hey @Lukas James
Congrats to you for your ambition! If you are looking to connect with someone for some guidance or advice, feel free to reach out. I also 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/
@Jeffrey Donis Yes! Let's do it as soon as you're available. Let me know!
By the way, you gave some great advice and can't wait to dive deeper with you my friend.
@Dan Sheeks Hey Dan,
I am interested in talking to you directly. I just read your article and found some good value in that! Would love to get on a call to discuss my particular situation, but if you could for now, read my bio to know a little more about me. Hope to talk soon and let me know when you are available! Cheers.
Hey Lukas, congrats on the money moves.
So with multifamily properties bigger than 4 units, you will now find yourself in the commercial lending world opposed to residential and the commercial side is a completely different beast.
When financing commercial purchases, banks will weight more of the decision on the asset rather than your personal credit. But the underwriters would still like to see you have some type of experience or a partner who knows what they are doing.
And just like with anything, it will be a very relationship based transaction (if that makes sense). One banker might tell you "No way!" and then the other one might give you the green light. I would suggest you start by talking with banks/credit unions in your area and see what suggestions they have for you in terms of commercial lending options.
I hope this helps provide you some insight. Feel free to reach out if you got any other questions, I'm always happy to help.
@Lukas James Congrats on starting the journey so early! Wish I would have done that.
Start by listening to podcasts, reading books, and networking in your local area about the subject that interests you 👍