22 Years old with zero credit and $4,000 how can I start REI

116 Replies

@Cirilo Villar I'm 23 and have found that just reading as much as possible and learning as much as I possibly can is where it's at. Because I don't have a ton of capital to work with, I'm getting into wholesaling. Seems like a very good way to get your foot in the door.

I bought a condo "subject to existing financing"  I gave $4000 to the seller and started making payments on the existing mortage, total payment amount of $232/month.  I sold this 9 years later for $225000.   The people probably would have sold it to me for $2000.  I just never asked. 

Hey @cirilo, I just got my social security number few months ago, I can kinda relate to credit situation. pretty short credit history obviously but you can find ways. If you know someone with a good credit score and history, you could ask them to add you as authorized user but you dont have to have the card itself, so there is no risk for them. It will boost your credit score really quick. I had it this way and then bought myself a car for uber, so I also make better money with a car that I'd needed regardless. Had very high interest rate but no issue to pay it down, so it also makes a great history for me. just make sure you actually dont pass %10 of your limit. I know that %30 is what's recommended to not pass but 10 is the best result, speaking from my own experience and research. This is my first post btw, hopefully did some help.

@Cirilo Villar

@Cirilo Villar

The fastest way I know to buy a house is asking your circle of influence for capital to get started. You’ll have to learn the skill of fundraising anyways so learn it now. There is no credit required to buy a house all cash.

Definitely use credit karma. It's quite useful for monitoring and alerts. A lot of great advice for credit building being said. But, I'll add my own. Instead of using the credit card in lieu of actual cash. Only use the credit card when you KNOW you have the funds to pay it off. One of the podcast guests suggested this by merely using it as a proxy to your money. This is also help you hone your budgeting skills as well.  

@Cirilo Villar Congrats on starting the journey! Getting advice and learning from those who are already successful investors is a great first step. I bought my first duplex at 24 so I definitely know what it's like to want to start investing and buying properties right away. 

There is a lot of great advice in this post already, but I'll throw my two cents in from my own experiences that helped set me up for success:

-First would be to get your financial house in order and prepare yourself for the journey ahead. Turns out real estate is expensivse! I constantly read financial books and learned proper financial habits. I learned to live off 40% of my income and save the rest, taking advantage of the fact that I was young, single, and flexible. I would recommend saving more money before buying your first property probably closer to 20-30k.

-Get a job or find a way to make a solid income while you are learning and preparing. Build a solid foundation to grow off of while you are so young. Spend that time building up savings to learn about real estate investing, network, and soak up as much knowledge as you can. There are tons of posts and resources on BP for newbies. 

-Look into house hacking as your first real estate investment. That's what I did and I highly recommend it. Not only does house hacking let you get into an investment property with FHA financing (low down payments), it also helps reduce your housing expenses allowing you to save and invest at a faster rate. I bought a duplex with an FHA loan and put 3.5% down, rented out one unit, and got a roommate to maximize income. I actually cash flowed a little bit each month so I had 0 housing expenses. The equity you can build doing that combined with the extra savings potential can be a powerful vehicle for growth.

-Stay positive and keep grinding! Good luck.

Provide me 4K and I will make it grow. There are so many ways to make it happen. One thing I did was bought a mobile home in a park (FSBO with owner carry) and rented it out. I house hacked it. I cash flowed it at 600/month. Once I had enough for another property, I did it again. I listened to BP podcast with Felipe Mejia (show 329) and he did the same thing in Nashville. There are so many ways to make money. In Dinosaur, CO I bought a mobile home and sold it a couple of years later for triple what I paid for it. One can do a lot with $4K if they are resourceful and work.