Hey everyone, I'm new here. For the record I'm currently 17 years old right now and I'm trying to learn as much as possible about real estate so that when I'm 18, I can start with a plan already set. I've been studying real estate since I was 14 years old, I know a little bit here and there. Anyone who could help me out would be great. I'm mostly into building my passive income portfolio. I look forward to meeting all of you.
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
16y
Well, you can start building your credit by getting a credit card. Initially, you may have to open a savings account with the bank who issues the card (secured), and later on the bank will let it go to unsecured. Fill you car up once a month using the card. Set the money aside to pay the bill immediately so that you are not running up a balance. After six months or so, you will get a credit history and score. This is important because it will teach you discipline which is very important.
On the real estate side of things, just keep doing what you're doing. Read up, ask questions, and keep repeating that process because you will always be learning.
Ah, I missed that. Luis may be asking that from the buyer's perspective. Seller financing, Luis, is a good way to buy property. That's how I bought my first house. The seller acts as both the seller and the lender. They give you a loan for all or part of the amount your borrow. It can be a good way to get a loan with less qualifying and with a lower down payment.
But in any case, I would still need credit for that right? Also, is it possible to apply for credit even without a job when I'm 18? Or is that out of the question?
Real Estate Investor · Atlanta , GA · Member since 2009 · 70 posts · 15 votes
16y
On seller financing not necessary to have good credit. Remember, the seller is acting as the bank also like Jon said, but they can base their judgement on whether to give you the financing based on your credit. That is their choice.
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
16y
Originally posted by Luis Fuentes:
Originally posted by Jon Holdman:
Ah, I missed that. Luis may be asking that from the buyer's perspective. Seller financing, Luis, is a good way to buy property. That's how I bought my first house. The seller acts as both the seller and the lender. They give you a loan for all or part of the amount your borrow. It can be a good way to get a loan with less qualifying and with a lower down payment.
But in any case, I would still need credit for that right? Also, is it possible to apply for credit even without a job when I'm 18? Or is that out of the question?
Todd is right. The point to having good credit is that you don't know when you may need to utilize it so you always want to have a good score. The way you have a good score is by paying on time and not carrying high balances. You can pay the balance in full every month and still have a great score. About the only time you won't need to worry about credit is when you are paying cash for your transactions.
Real Estate Consultant · Las Vegas, NV · Member since 2009 · 35 posts · 0 votes
16y
Welcome aboard Luis. I'm also new to this site and have come across a lot of good information by some of my fellow colleagues. Best of luck in all of your endeavors and maybe we could do some business in the near future. Take care.
Huber Heights, OH · Member since 2009 · 120 posts · 15 votes
16y
Without credit I would imagine your down payment would be much larger then 20% down. Not saying it can not be done, The sellers main concern is "Is this guy going to default?" For more information, I would contact an experienced RE Note investor, my area is in Brokering RE Notes. Hopefully I helped you out some!!!
LeJonR
Without credit I would imagine your down payment would be much larger then 20% down. Not saying it can not be done, The sellers main concern is "Is this guy going to default?" For more information, I would contact an experienced RE Note investor, my area is in Brokering RE Notes. Hopefully I helped you out some!!!
LeJonR
Thanks a lot for your posts. They gave me a lot of insight. Looks like I'll have to find other ways to circumnavigate credit. I doubt I'll be able to get loans till I'm at least 19 for properties.
Real Estate Investor · Columbus, OH · Member since 2009 · 9 posts · 1 vote
16y
Yes, one thing that you should avoid is spending money that you don't have. I can see why you may want to get creative and essentially borrowing money to make that first deal, as waiting and saving your own money can take a while, but don't rush into using that same method to do anymore deals. Even still understand the risks involved by thoroughly doing your homework regarding every aspect of the deal, as you'll want to minimize the risk as much as possible (and there's ALWAYS risk in any investment). Establishing and maintaining excellent credit to get that 1st loan (should you decide to go that route), and not going beyond your means in terms of spending are parts of financial discipline. A lot of people have failed to use financial discipline, and you see the results of such behavior everyday (bankruptcies, foreclosures, etc.)
Yes, one thing that you should avoid is spending money that you don't have. I can see why you may want to get creative and essentially borrowing money to make that first deal, as waiting and saving your own money can take a while, but don't rush into using that same method to do anymore deals. Even still understand the risks involved by thoroughly doing your homework regarding every aspect of the deal, as you'll want to minimize the risk as much as possible (and there's ALWAYS risk in any investment). Establishing and maintaining excellent credit to get that 1st loan (should you decide to go that route), and not going beyond your means in terms of spending are parts of financial discipline. A lot of people have failed to use financial discipline, and you see the results of such behavior everyday (bankruptcies, foreclosures, etc.)
Well assuming I get someone else to finance the deal, that means I would hold no liability, correct? And also, say we decide to split money, should I make the person sign a contract before hand stating that he/she agrees to split the profit, before even showing him/her the deals I have found? Is this something I can make myself, or would it be best to go to a lawyer for something like that? Also, how much would it usually cost for a competent lawyer to perform such a procedure? Because, pretty much, if I don't have it on contract that me and the investor will be splitting the money, he/she could basically just close the deal and not be legally obligated to give me my share, right?
Real Estate Investor · Columbus, OH · Member since 2009 · 9 posts · 1 vote
16y
You would likely be held liable. That's why you'd want to do your homework, because you'd stand to lose something as well should the deal fall through (like owing the money financed). Correct on obtaining a signed contract. A signed contract would be one of the first things to obtain, because you would definitely want to protect your interests. While you could make the contract yourself, you may still want a lawyer to at least look it over, as they'd be who you would consult if you had any issue enforcing it. Whether or not the person doing the financing would sign a contract before learning of the deals is up to them, but they'd likely want to know the details beforehand. Just put yourself in their position, if someone asked you to finance a deal, would you commit (by signing a contract) to do it before knowing any details on the deals in question? Regarding what the lawyer would charge, I don't know.
I could still be held liable even though I'm only 17? I would think something like that would be unprecedented. Also I could make the investor sign a confidentiality agreement before I show him the deal right?
Also, what are some great methods on finding deals? What kind of people should I primarily look for? Where are the best places to find them? And how can I find foreclosure deals as well?
Real Estate Investor · Manassas, VA · Member since 2009 · 108 posts · 4 votes
16y
Originally posted by Luis Fuentes:
I could still be held liable even though I'm only 17? I would think something like that would be unprecedented. Also I could make the investor sign a confidentiality agreement before I show him the deal right?
Luis:
Nice to see some young blood around!
I myself started in business when I was 14 years old (long story).
I am not sure in regards to the other members in this thread, but if you want help when it comes to cash flow notes or better known as seller financed paper, then PM either Lejon R or myself.
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
16y
Originally posted by Luis Fuentes:
I could still be held liable even though I'm only 17? I would think something like that would be unprecedented. Also I could make the investor sign a confidentiality agreement before I show him the deal right?
Luis, with this statement it sounds like you are trying to find a way out of accountability. There are cases where minors have been emancipated adults and held to those standards like everyone else, so yes it is possible, according to what the judge sees should you ever be sued. And that attitude would kill your potential when you become an adult oficially.
Your best move might just be to petition a court for adult status due to your proven responsibility. That adult status document may have to be shown to every bank and investor till you are 18, but you will gain much respect for doing the right thing legally and officially.
Well, it's only 4 more months until I turn 18, so I'll hold out till then. How long do you think it would take to build a nice credit score? Would it be realistic to be able to attain property loans by the time I reach the age of 19? Or would they never even consider such a thing due to my age? Unless I could prove the property itself is enough collateral? That the estimated income generated from that property would be more than enough to pay the loan?
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
16y
There used to be first time buyers programs out there which would help in these matters. It is really up to the lender, but you could concievable get a loan and purchase a property as soon as you turn 18.
It is really up to the lenders, so I might just build a lenders database by talking to all the banks in the area and see if they have any such programs. And see what they would require.
Do not allow them to pull a credit histroy at this time as too many inquiries on your credit history may hurt you later.
Just get information on their lending requirements and procedures, letting them know that you will be seriously doing this.