Los Angeles, CA · Member since 2019 · 97 posts · 38 votes
Hey everyone I’m 22 years old turning 23 in December and i want to get started in Real Estate Investing flipping houses preferably and having that return buy me rental properties for cash flow. However, I have never opened a credit card and I always pay for my things straight up even my car. I have zero credit, $4,000, and an understanding for real estate investing but have no clue on specifics. Please direct me the right way to achieve financial freedom by the age of 28 through real estate investing
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y
Maybe I'll be a minority in this but $4k is not enough money to do anything serious. You are wasting your time. Go learn some high-value skills with the money and go make money by increasing your earning potential. Go into sales something you can control your own destiny. I like to work with reality, not fantasy. Probably not the answer you want to hear but its the truth.
Go attend some real estate investor meetups. Check out meetup.com and the Bigger Pockets events section to find some in your area.
If I could go back in time and tell my 20 year old self something life changing it would have been "Buy a fourplex and move into it, stupid".
With only $4k and no credit, you're going to have to get REALLY creative to do anything interesting. If you're truly committed to your goal, consider going and being a wholesaler.
Los Angeles, CA · Member since 2019 · 97 posts · 38 votes
7y
@Geordy Rostad
So I applied for a few credit cards such as Discover IT, Macy's, and Sears I was declined by Sears and I haven't heard anything back from the others later today I will go to my Wells Fargo bank and open a Secure Credit Card. Someone once told me that i can buy a house with an FHA loan it will only require me to put in 3.5% -5% of the total cost as down payment is this true?
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y
Maybe I'll be a minority in this but $4k is not enough money to do anything serious. You are wasting your time. Go learn some high-value skills with the money and go make money by increasing your earning potential. Go into sales something you can control your own destiny. I like to work with reality, not fantasy. Probably not the answer you want to hear but its the truth.
Rental Property Investor · Tampa FL 33610 · Member since 2011 · 254 posts · 56 votes
7y
@Cirilo Villar great 4 U. Secured card is best. Yes slow down with the applications. Too much "new" credit will hurt you too. If you are an authorized user on a parents card that will help score quick but do NOT spend on that card. ONLY use that score.
Start wholesaling/flipping and assigning to increase your income and savings/liquidity. Earn and learn.
@Frank Wong OP was asking for advice. He is not wasting his time. He IS learning REI and that is pretty quick return. This is your opinion and that is OK. Don't tear down someone's vision for success. What works for you does not work for others. He can flip with no money and no credit. I did ! I still do (but I have credit now)!
For me, I could never be an agent because that is too hard and frustrating.
We are here to give advice good and bad but not squash on someone. No that is not the truth, only your opinion. Thanks.
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y
Hi Barbee,
I am not here to tear anyone's dreams down, I am actually here to help people. Just read through my posts that is the last thing I want to do. I am giving someone advice which he asked for. Maybe it's not the advice he wants to hear but its a high probability play from my side. The exception doesn't make it the norm. If I was 22 and I went on a public forum asking for advice, I would want everyone to give me their personal opinion and the truth. In life it's not all about cheerleading and saying "woo hoo" to everything. The real world doesn't work like that. I want to know the reality and give me the truth and I can then take all the advice and decide for myself.
If you can’t get approved for a card, go to a local CU and set up an account. Then get with lending agent and ask for a $500 personal loan which they will likely give you with no credit with such a low balance. Place the $500 loan in your new account, and set the account up for auto pay. You will have to pay $30-40 in interest but you will have a years worth of perfect credit history when your balance is “paid off”.
It’s hard to get credit without credit. Consider the $30-40 the cost of doing business and then do your best to avoid typical consumer debt for the rest of your adult life. 👍🏻
Rental Property Investor · Tampa FL 33610 · Member since 2011 · 254 posts · 56 votes
7y
@Frank Wong yes I appreciate your opinion. You are probably MUCH MORE informed than I am.
You said that is the reality but it is not. He is young and has many years ahead to build REI. Yes truth matters even if it hurts. I did not say cheerleading haha.
I jumped in feet first and took action even though people said I would fail without money and credit. I guess I am an exception ;)
Sales IS hard. We all sell in passion. OP wants REI. He can do it!
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y
@Account Closed
All good, I am just trying to steer him in the right direction, His main singular focus should be earning and increasing his money not low probability plays investing with $4k. He can still invest and do this business but the odds are stacked against him. Yes, you are the exception. That is great!
@Cirilo Villar I got my first credit card from the bank where I had my checking account. It was a student account so no interest %. I would suggest going to your bank and applying for a credit card. Store credit cards can be tricky and usually look for existing credit scores.
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
7y
Get a credit and put savings in the bank. Until someone wants to lend you 80% hard money offering cash and able to have 20% cash for down payment to be wholesaler.....
Los Angeles, CA · Member since 2019 · 97 posts · 38 votes
7y
@Geordy Rostad
I opened up a Wells Fargo secure credit card today it should be coming in the mail soon (:
What I dislike about this secure credit card is that i have to pay a minimum fee when I use my own money ! I guess that’s the same for all credit cards though
Los Angeles, CA · Member since 2019 · 97 posts · 38 votes
7y
@Frank Wong
Well right now since I'm building up my credit and as I save up more money I am learning as much as I can about REI so that when I'm ready I'll be able to execute my plans with confidence
I have a friend who swears by Credit Karma. You can track and manage your credit with that. It has a simulator to show you different actions you can take to build your credit faster.
Contractor · Mobile, AL · Member since 2019 · 47 posts · 32 votes
7y
@Cirilo Villar never ever apply for a retail card it’s a waste of credit. Get a capitol one card it’s a great starter card. They have options for a secured card that will help you build credit. Check your own credit before applying Freeannualcredit report.com To see exactly what’s on your report. Stay away from hard inquiry’s unless your sure of your credit.
Real Estate Agent · Cypress, CA · Member since 2018 · 88 posts · 41 votes
7y
@Cirilo Villar
Congrats on your first credit card. Be smart with it. Set it up like a debit card in the sense you pay it in full every month.
Do not fall under the miss conception that you must purchase everything with your credit card. Find out the rewards such as 5% back on Gas for the quarter and use it for that.
New York, NY · Member since 2019 · 10 posts · 12 votes
7y
There's a few things you can to set yourself up well for the future:
1. Invest in REITs (or a REIT ETF). Use a brokerage that charges no commissions.
2. Get a secured credit card and use it at least once/month to start a credit history.
3. Get a small personal loan and see if the lending institution will allow you to secure through a savings account or CD (in the amount of the loan).
4. See if a parent or family member with good credit will add you as an authorized user. This may allow you to inherit their payment and credit utilization history.
5. Work with others in your community who have flipped houses. Learn the skill set needed to identify what buyers want and how to do the work. This should also help you build local connections.
6. Learn about real estate capital markets, as they have a huge impact on flipping. In a poor economy, flippers can do substantially worse.