Investor · Houma, LA · Member since 2014 · 162 posts · 40 votes
Hello everyone. Going to get right to the point here...
I'm 17 years old, will be a senior in highschool this year, and college is creeping up fast. There's no doubt REI is the path I am taking and several seasoned investors told me a college degree isn't exactly necessary. I know college is good but seems irrelevant. I'm going to get my brokers license once I turn 18. My parents demand (won't take no for an answer, I've tried) that I go to college. My parents don't have the money to put me through college, so I have to pay my own way using whatever J-O-B *tear* that I have. I was planning on using that money to get deeper into REI instead of using it for college. So my question is, is there any "degree" for real estate? Is there any classes I can take to recieve a legit diploma along the lines of real estate? I'm not talking about just classes, courses, guru classes, I'm talking about a legit college completion certificate. If not, what would be my best course of study? What should I major in? Etc...Any advice would be VERY helpful. Thank you.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
12y
Damon - One aspect that you really can't plan in are your personal growth and maturing during your late teens and early twenties. At 19 I saw the bright light and changed college majors from pre-med to business. After a twenty minute conversation with an acquaintance helped reveal to me my true calling I changed majors and never looked back.
An accounting professor became a close friend and guided me towards real estate. He owned several blocks of apartments near campus and did not need to teach.
At 21 my Dad died, during my fourth year of school. It was at this point that i knew i had to do a lot of growing up...in a hurry.
I had been buying and selling sports cars as a side income when my godfather suggested I take a weekend seminar on how to buy foreclosures. Much like fixing up cars, he said.
I got the "bug" and it has been part of my DNA ever since. That was 1978.
Thank you so much. That is a great point. Sitting in class picturing how I can use what I am learning to immediately leave class and apply it to the real world. Most people learn in class and wait until they graduate to apply what they've learned. I want to be very clear on why I dislike school so much. Not sure if you've ever read "Rich Dad Poor Dad" by Robert Kiyosaki, but that book really opened my eyes to what school is all about. I sit in class and learn biology, chemistry, physics...etc. None of this INTERESTS me. I guess that's why it is so boring. But when I get into my math classes and start learning about how to calculate interests rates and learning financial math terminology my mind wonders to real estate and it interests me. I can stay focused and have no problem learning. How do you apply photosynthesis to real estate? How do you apply what your left knee cap is called to real estate? YOU DON'T! And that is why I am so hesitant about more school. But the more I get advice from people like you that what I learn in college will be applied directly to my future, and not what could be in my future really turns the tables. In that case, I would be utilizing what I learn immediately. The only thing that concerns me is what I learn about financing in college, is probably the same things I can learn from people for free here on BP. So the problem comes in when I start asking myself, "Am I utilizing my money for the best by taking college classes, or should I utilize that money for real estate?" That was the ultimate problem. Now that I don't have a choice to go to college the questions is, what do I go for. My Dad and my step mom (the two I live with) both have bachelors degrees in the medical field. They are both registered nurses. They both make decent money. Just yesterday my Dad came home from work and slammed the door and said he absolutely hates his job (even though he gets paid well). So, look where college got him...In a miserable place everyday. I say they make good money but like most, they are also struggling financially. This makes me wonder why college is so "right" if it will just lead me to the position he is in. But then again, I can apply what I learn to help benefit me, not who I work for. In the end I don't have a choice...my dad told me if I don't go to college he isn't helping me because I'm not helping myself. Regardless of whatever else he pressures me in to, he, nor anyone else, will ever steer me away from real estate investing. I know now, those who doubt real estate only doubt it because they aren't educated enough about it.
Rental Property Investor · Saint Louis, MO · Member since 2014 · 313 posts · 326 votes
12y
If you need a four-year degree to get into a specific job/career that needs one and that you're definitely interested in (accounting, law, doctorate, computer science, etc.) then spend the money and get a 4-year degree right away. If you don't know what you want to do or you want to give the real estate game an earnest attempt off the bat, then don't go to a 4-year college right away.
My parents encouraged me to "stamp my ticket" by getting a bachelor's degree right after high school so that I'd always have it in my back pocket. I didn't know what I wanted to do, but was fortunate enough that they paid for my school, so I was able to get a degree in a subject I enjoyed and was good at (Geography) and then got VERY lucky to snag a job using that degree in early 2009 when the recession was in full swing. The "plan", as it were, worked out for me, but I should have ended up like one of my many peers who are struggling with student loan debt for degrees that don't have a clear-cut place in the job market. Don't get any old degree just to get one. The days where that was good enough are long gone.
If you're committed real estate, then give it a shot while you're young. You have nothing but time right now to work, hustle, and make things happens. Owning a home, getting married, having kids and pets are all wonderful, but they're all responsibilities that require time and money and, for most people, that makes taking a risk on becoming an investor a tougher decision to make. I would encourage you to continue in school in the meantime, but do so by going to a local/community college or through a big university's online program which can save you a ton of money. Education is becoming available a la carte more and more each year. You can pick and choose specific classes or tracks that apply to what you need to learn in real estate or try to build toward a degree or certification that will make a worthwhile "back up plan". This should ease your parents' minds that you've considered the possibility that REI might not pan out and that you want to have something in your back pocket. There are plenty of certifications (HVAC, GIS, EMT, computer programming, etc.) that take < 2 years to complete and can lead to a decent job pretty much any time you want. Get one of those in the bag and then you have a safety net to fall back on or you can use it to get a full-time job right away and at age 19-20 you can start saving a TON of money while your living expenses are still fairly low. Put this toward building your REI business on the side while you have a nice income stream and will be a better loan candidate for banks.
Don't get me wrong. College is a blast and I enjoyed myself immensely. To have 4 years of limited responsibility (I worked 30 hours a week and took classes full time, and still had far more free time than I do now) is a blessing. You will meet a lot of great people and make memories, but it's also VERY expensive and when you're done at 22-23 you'll be starting at square one as opposed to someone who started at 18 and is 4 years into a career or their own business. If you want the "college experience" then move to a college town with a major university, but attend the smaller/local school in town. You'll still meet a ton of kids your age and get to go to bars and parties and football games. Heck, buy a duplex and rent out the other side to college students. Lastly, check out Coursera.org for free online college courses. I've taken several and they are a great supplement to a traditional education. They have entry-level finance and accounting courses there.
It's all a trade-off (everything in life is a trade-off), but you have to decide for yourself which ones make sense for you.
Thank you for your service. However, I don't think you can use federal loans to put down on a multifamily even with an FHA loan. You can't finance any more down actually.
I'm planning on buying a quad in Baton Rouge with FHA loan. Rent out three, live in one. I am definitely going to check out coursera.org. Being they are free, do they still count as college credit, or are they free "college level" courses, and not actually college courses. If I could pass these and help myself test out of a few classes that would be great. Would also help me get into schools. I already put one college class in the bag when I was 16. So as long as those count as credits they would be extremely helpful. Not sure how I would get it to show on my transcript though. I'll look into it, thanks.
Zachary, LA · Member since 2013 · 11 posts · 2 votes
12y
Damon -
First, I appreciate your drive and passion towards real estate investment. I live near Baton Rouge (in Zachary), and own a quad in Baker that I purchased over a year ago for $150K. I don't live in it (I own a house in Zachary), so I had to put down 25% to get the property. That was one of the cheaper units I could find. Some of the quads I found ran in the $250K range. You can probably find a decent duplex in Baton Rouge for $150K. If you qualify for an FHA loan (questionable with no credit history), that would be over $5,000 for the down payment alone (at 3.5%). I'm not sure that you would be approved for the Private Mortgage Insurance (PMI) that would be required for less than a 20% down payment.
With that said, I would like to give you some help toward making your dream a reality.
1. Start with a part time job if you don't already have one. It doesn't matter where you work, but you should start showing a source of income. This will help with #2.
2. After working for a couple months, apply for a credit card. You can start with a secured card (you use collateral to get the card) if you don't qualify for an unsecured version (no collateral required). This will start establishing a credit history. I got my first card when I was a freshman in college. It had a $400 limit. I still have that same card (20 years later), and through smart usage the credit limit is now over $25,000. I'm not sure if there is an age restriction (I don't think there is), so you should be able to get one before turning 18. It is going to be extremely difficult to purchase property with no credit history, so you should start building this as soon as possible. Use your credit card for bills or food and pay it off each month to avoid costly finance charges.
3. Go to college for two years. You can get a two-year degree (from Baton Rouge Community College - BRCC) in Business Technology with a concentration in Entrepreneurship. You will be able to take classes in accounting, economics, information systems, finance, management, and marketing as well as speech / business communications (which will be very helpful for a soon to be investor). Not only will you learn about the subjects that you will need to be a successful real estate investor, but you can network will other like minded individuals. If you can handle the work load, I recommend having a part time job while in college. You can definitely get student loans to help you pay for school (this will also slowly help build your credit once you start paying them back). You should also try to apply for grants and scholarships. If you maintain a minimum GPA of 2.5 and score a 20 on the ACT, you qualify for TOPS in Louisiana, which pays for your college tuition, including at BRCC. This will minimize the amount of loans you need. You can use your pay to start saving toward your down payment, and if you have left over money from your student loans, you can use that too. I recommend looking for roommates to share an apartment with or check the ads and just rent an extra room from someone to save on costs. The more you save on rent, utilities, etc, the faster you will save your down payment.
I don't doubt that if you really want this, you can make it happen. The best advise I can give you is to think about each purchase you make. Ask yourself: is this purchase getting me closer to my down payment? If not, you really have to think hard about whether that is the best use of your hard earned money. The more you can stash away now, the faster you will reach your goal. If you have any questions, feel free to inbox me. Good Luck!
Investor · Louisville, KY · Member since 2011 · 331 posts · 278 votes
12y
@Damon Armstrong - Have you ever watched or played Texas Hold'em? It's an interesting game to study. The pros know that the cards of are little importance. Identifying tells, understanding statistics, representing strength or weakness, considering your position/table image and maintaining discipline are all more important. Sure, you may have short-term set backs, but over the long-run the best player takes all of money from the player who only thinks about the cards.
In a similar fashion, being a successful real estate investor has little to do with real estate. You are a business owner. You must be able to communicate with buyers, sellers, contractors, lenders, employees, and a host of others. You have to market to sellers or buyers or both. You have to analyze opportunities and understand the financial implications (including the opportunity costs) of proceeding. You need to understand the financial markets and how they affect your goals. I could go on and on....
It is far better to learn how to do these things in college than by making mistakes in your business. It is also far cheaper. You are incredibly fortunate that you know how you want to apply the knowledge you gain. Approach learning with the zeal that you show for real estate. Absorb everything. As you build your business, the knowledge and discipline you gain from college will allow you to accelerate your growth at a pace that is otherwise impossible to replicate.
Three final points. First, don't rush through the experience. Being 18-22 and in college can and should be an awesome experience. Don't lose focus on the future, but enjoy the heck out of the present. Second, there is nothing that says you can't get started investing why you are in school. Buying a rental house that you also live in is a great way to do so. Paraphrasing Kiyosaki...Most people say 'I can't'; investors ask 'How do I?' Third, like poker, the game never ends. A constant pursuit of knowledge is what will keep you ahead of the competition.
There's an old saying:"You don't know what you don't know." (usually until it's too late) And you, my friend, (although amazing, as stated before) are young enough that this applies in spades.
As an investor and property manager I can tell you this: photosynthesis can make your property sell/rent faster and even, worth more. Borrow money from the wrong person for a 'great deal' that goes sideways, and you may never again forget what your left kneecap is called. (just kidding)
I've read many of Robert K.'s books and I understand where your coming from when quoting (kinda) him about higher education. But be careful. What he said was college is not an asset ('assets put money in your pocket, liabilities take it out' and even that statement could be argued ), he didn't say don't go.
Again, my point is this isn't an either/or proposition. Right now, you don't even know what being in that environment might lead you to... or save you from.
Wow. That really cleared up the next few years of my life. I seriously am writing that down. Thats super great advice especially about exactly what to go for. I have one question, though. Maybe two.
1. Business technology...what is this and is the only field I can have a concentration in Entrepreneurship? I'm assuming everything I need from business to finances would be included in those classes...but business technology sounds like computers and electronics used in the business industry. Or is it basically just business, with a concentration in Entrepreneurship?
2. If I save up the down payment now, when I go to apply for an FHA loan, if my credit isn't established yet, and my parents cosign, would their income/credit be sufficient enough to get the loan? They both make ok money and credit score is great, almost 800. But I'm not sure if the bank would give ME the loan with them only cosigned.
Real Estate Investor · KS · Member since 2014 · 6 posts · 2 votes
12y
Hey mate, fellow 17 year old here chiming in. It's great to see that not everyone our age is more interested in buying the newest iPhone over investing in their future.
I wanted to chime in about the advice given to you for a secured credit card. It's been my experience with multiple financial institutions that nobody will give you a credit card while you are still a minor, unless you have an adult co sign for you. I had enough trouble trying to get a debit card, and even then I had to have my mom's name put onto the account. I assume you'll find the same outcome for loans, bank accounts, etc.
My parents aren't very supportive of my ideas, so I'm stuck waiting until I turn 18 before I can even consider building credit. Hopefully yours are different, and you can have a leg up from everyone else.
Very nice comparison to poker. One question I have when you said it is better to learn the market in college than make mistakes in my business...in college do they teach the actual market you are in? Moving into BR and not knowing the market, that would be awesome. Or do you mean just teaching the basics of any market?
And your right he didn't say don't go...hopefully it will lead me to alot, and save me from more.
Dad is not buying any knowledge, haha, thats part of my problem. I have to pay my way through college myself. Hopefully, I can either wholesale a few deals off the bat, or start a rehab with a partner while still in Highschool. 5-10k wouldn't hurt. According to @Aaron Mazzrillo rehabbing is the best road to take as a beginner because essentially you are only acting as a project manager. If I could set up a fix and flip, get a partner to fund it, we can split profits. I'd love to get my first rehab knocked out while I'm 18. How possible do you think that is? Better yet, how smart do you think that is being so young? Leave school and go straight to my rehab on the days I don't have work. Spend as much time there as possibe. I could even get the deal from a reputable wholesaler. Maybe I should find the deal, and ask an experienced rehabber to walk me through it day-by-day and step-by-step for a profit split of finding the deal and helping "manage" it.
Investor · Houma, LA · Member since 2014 · 162 posts · 40 votes
12y
@Account Closed
Sadly not....I am in the same boat as you. I can't get a credit card, my parents are on my debit card and bank account. They are 98% UNsupportive of my ideas also. The 2% that they are supportive of is that I'll be out of their hair and can take over my truck note myself, and will be able to pay them back for everything if I do get good and wealthy. I also have to wait until I'm 18 to build credit. It seems it's an unfair world my friend...I know the feeling.
Atleast I'm not the only 17 year old sitting around waiting to turn 18. How long do you have left?
Real Estate Investor · KS · Member since 2014 · 6 posts · 2 votes
12y
It's almost scary how similar our situations are. My dad is of the opinion that I have no need for credit or credit cards, as all they'll do is bite me later on in life and drag me into stupid amounts of debt. I've also got a truck, and my parents are shaking in anticipation for me to take it over financially. I'm already in charge of maintenance and fuel, soon I'll be in charge of insurance as well. I'm lucky that they paid cash for it, so no car payments for me.
They don't support me now of course, but I assume that once they start seeing cash flow into my accounts they'll tell me how they always believed in me. I'm pretty sure they're banking on me to take care of them financially once they're done with working. Such is life however, and I guess we just have to play the cards that we are dealt.
I turn 18 this coming February, so, a little over half a year left for me. Nonetheless, I still count down the days. Real estate is one of those things that I stay up late at night thinking about, just for fun. How about yourself?
If I could set up a fix and flip, get a partner to fund it, we can split profits. I'd love to get my first rehab knocked out while I'm 18. How possible do you think that is? Better yet, how smart do you think that is being so young? Leave school and go straight to my rehab on the days I don't have work.
You should listen to the podcast with Michael Quarrels. I haven't finished it yet, but he talks about jumping right into real estate at a young age. About a year ago, I saw a new article about a young girl who bought her first rental or did a flip. I think she was like 16 or something. It made national news.
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
12y
Her name is Willow Tufano. Google her. She used to buy and sell stuff on Craigslist. That led her to buy her first rental at 14. I saw one article that said she bought another, but it was over one year old so she may have more now.
Investor · Houma, LA · Member since 2014 · 162 posts · 40 votes
12y
@Account Closed
Man that's insane?! She was definitely lucky to have the support she had! If that was a year ago she's probably 17 now (; Lol. Really though, I'm going to look up that article and pray she never sees this post. By the way, I did listen to the podcast with Michael Quarrels. Do you think being a project manager is easy? Do you just tell contractors your budget and let them do everything accordingly, or do you have to specifically tell that exactly what kind of everything you want, and where you want it? I guess the biggest unknown for me is the investor/contractor relationship.
Queen Creek, AZ · Member since 2014 · 2k+ posts · 1k+ votes
12y
One of my real estate teachers told our class the story about how when he went to ASU as a student he sold condos to the "rich kids", cheaper then rent, get some appreciation, and a tax write off too. His family had been in real estate for years and he grew up with it (his mom was a broker) but in order to get the parents who were writing the checks to take him seriously he had to partner with an older person that had just started at the firm.
Everyone assumed that he was "Helper" for the older guy when, in fact, the old guy was his gopher. Neither one of them let on and everyone was happy.
Queen Creek, AZ · Member since 2014 · 2k+ posts · 1k+ votes
12y
@Damon Armstrong No he was finding all the deals but when the kids parents showed up for the signing they refused to believe that someone so young could know what they were doing. The old guy was green as can be but everyone just assumed since he was older that he was in charge so my teacher used him as a front to get credibility.
He found students that wanted to live off campus and convinced them, and their parents, that it was a better deal to buy a place then to throw money away on cent for 4 years. There was a podcast a few weeks ago about an investor that specializes in renting to college students.
Zachary, LA · Member since 2013 · 11 posts · 2 votes
12y
@Damon Armstrong
Question #1: Business Technology would definitely put some focus on computers. One of the classes teaches you about the role of computers in business. There is also a computer-based accounting course. I recommend checking out the BRCC website for more information as they have more programs to chose from. I picked one that I thought would be interesting to you based on your desire to learn about business and finish school as soon as possible. There are other choices including a two year prep course of study to get you ready to get the full bachelor of art/science from a four year college as well as other two year Associates degrees. Generally community colleges make advisors available to you to call and talk to. You tell them what you are interested in (for example Entrepreneurship), and they help you find something that meets your goals. I wouldn't discount the impact that technology will have on your business dealings. Learning to use spreadsheets and graphs can really be beneficial. I use Microsoft Excel to evaluate my deals and determine how long it will take to be profitable, return of investment, etc. I also use it for setting up my budget and tracking my net worth and retirement savings. I'm not saying that you need to go to school to learn this, but it's valuable having a class or two in computers to know how they can help you reach your goals.
Question #2: It's harder to answer this one. Banks not only look at credit scores for past history, but also current income vs. debt ratio (i.e. do they have a lot of debts compared to their income) and other things such as assets (checking, saving, investments, etc.). You mentioned that your parents make good money but still struggle financially, that is probably a sign that it would be difficult for them to co-sign a loan with you. You would also have to look at the specific rules for FHA, there is a rule about only having one FHA loan at a time, meaning that if your parents currently have an FHA loan, they will not be able to co-sign for another one until the current loan is paid off. There may be a possible loophole with this rule (related to investment property), so I recommend looking into the details. If they are able to co-sign with you, the loan will be in both of your names, and it will build credit for both of you. You would make payments, but if you default, your parents are equally responsible. I'm assuming when you are asking about the bank giving "you" the loan with your parents co-signing, your concern is that if their name is attached to the property they could be able to get some of the profits. I recommend consulting a lawyer for this concern. It may come down to how the property is titled. I'm not sure if the title has to have all of the names from the loan or if one name is allowed. A lawyer should be able to answer that for you. On a related note, the Business Technology degree has a class in Business Law!
Professional · Wichita Falls, TX · Member since 2012 · 124 posts · 70 votes
12y
Damon and Melissa, age discrimination like in Bob Estler's comment. Not to mention everyone always pointing at you and telling you how young you are. I too had an older guy that I took along with me to negotiate my earliest real estate deals. Then, when I felt I had enough deals under my belt that my experience and holdings would speak for me, I didn't need the older guy with me. That is when all the comments about my age started. The idea of having an older business partner was also mentioned in one of the earlier BP Podcasts too.
Real Estate Investor · Fort Lauderdale, FL · Member since 2014 · 158 posts · 100 votes
12y
You're young with tons of potential and time. A few years to get a degree is well worth it - I suggest business with electives in finance. I like the idea of getting your RE sales license and working on that while you're in college. I don't think you should have an "either/or" mentality about it - think "how can I do both?"
I got my undergrad degree in Microbiology, and I don't use it at all, but I learned a lot about discipline, how to set priorities, and made lifelong friends, so if you can swing it then go for it. Also, its always good to have more options in life than fewer - you never know how the future will be, so I think its good to have a degree in your back pocket.
I only got into real estate when I was 27, and wish I had started that sooner!
Good luck, if you're thinking like this at your age you are on the track to success!
Real Estate Agent · Mead, CO · Member since 2014 · 75 posts · 12 votes
12y
Not sure if you are interested in going so far but Colorado State University offers an actual degree in real estate. It is all the course work you need to take the exam.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
12y
I haven't read the rest of the responses, but here's my $.02 in general when it comes to this topic...
Do you want to invest in real estate or do you want to run a business investing in real estate? In other words, do you want to focus on doing transactions or do you want to focus on creating a entity larger than yourself that has the ability to generate income independent of your full-time participation?
If you want to run a real estate business (or any business, for that matter), I highly recommend taking courses that will help you learn how to start, manage and automate businesses. This includes business courses, finance courses, entrepreneurship classes, business law classes, etc. You can take these classes as part of a formal degree in business/finance or you can take them as electives while pursuing a different primary degree. You can even take these types of courses on their own, independent of a degree.
The nice thing about going this route is that, even if you decide RE isn't the right vehicle, you'll still have the skills to focus on other types of businesses or ventures.
Of course, if you just want to do real estate transactions and have no desire to build something bigger, take the real estate licensing course and find a good mentor. But, also make sure you have a backup plan in case you find you don't like doing real estate transactions or in case the market gets (more) difficult.
Do you think being a project manager is easy? Do you just tell contractors your budget and let them do everything accordingly, or do you have to specifically tell that exactly what kind of everything you want, and where you want it? I guess the biggest unknown for me is the investor/contractor relationship.
I do think flipping is the easiest aspect of investing. You manage people and money. That isn't too hard. I rarely tell my contractors my budget. I let them bid the job and tell me what they expect it to cost. If it is over my budget, I look for ways to bring it within or under budget. When I first start working with one, I will show him interior photos of properties and explain what I am looking for. After a few jobs, I let them make the decisions, but stay involved in any floor plan redesigns or other structural changes.
I am having a new roof put on a building I own. I have estimates from 3 contractors for $11K, $15K and $17K. All way over what I expected to spend. Actually, I found these prices to almost be insulting to my abilities and experience as an investor. I can get a whole house rehabbed for $17K. I started tapping into my network and discovered that many roofing companies actually don't tear off the roof themselves. There are companies they hire that do roof tear offs. So, why would I pay a roofer to hire another company just to tear off a roof and make a profit on that work? We're not talking about a general contracting job who is going to get dozens of sub bids for specialty work and oversee and manage all that work. Labor is the most expensive cost and they aren't even going to do it so why should I pay them?
Well, I found one of those companies and hired them myself at a fraction of the cost. Then I found another company who will deliver to the roof all the materials I need. Lastly, I found a roofer who was willing to charge me a day rate for labor to install the roof. Total cost: under $5K. This is being a project manager. Getting bids, hiring out those jobs and writing checks, all from the comfort of my office. You can do the same with any rehab and flip houses.
Get a deal from a reputable wholesaler. Bring in your own cash, private or hard money to close. Partner with another flipper to bring in the gap funding (difference between hard money loan and purchase price + closing costs) if needed, and who will fund and oversee the rehab. Hire and agent to sell your house. I do this exact model when I have too many rehabs going, but I find a juicy deal that I don't want to wholesale, but I'm a broker so I'll sell the property myself. After we close on the acquisition, my main job is writing checks to cover the monthly loan payments and corresponding with the flipper/investor I partnered with to make sure things are moving along smoothly.