How to start with no money or debt?

Question

Hello, I am an 18 year old with only $200 in savings. How do I start house hacking with only this amount of savings and no debt?

Scott Trench · Answer

Love the enthusiasm and desire to get started in REI so early! Great job. I'd start with an all out approach to building wealth and learning over the next year or two. If you can accumulate $10,000  or more in the next year and prove stale income and good credit, that might be a great spot from which to more seriously consider the first purchase.

From there, a fixer-upper house-hack or live in flip might be a great opportunity to develop some practical skills that can help you supplement your income or add a lot of value economically to your purchase!

A good place to start might be in just thinking about pouring a financial foundation capable of making investments, like that required to house-hack. Start by saving $100 next week. Then boost that to $150 the week after. You'll know you are doing it right if you are budgeting and extremely thrifty, finding opportunities to get extra work or earn extra money, and pumping books on business, economics, personal finance, investing (of all types, including real estate) into your brain, whether audiobook, physical book, or similar.

Here are some potential (BIG) goals to shoot for one year from now:

$12,000 in savings

$2,000 per month in savings (at first, you will save less, but in a year from now, can you be in position to save $2,000 per month or $24,000 per year. Think month 1 saving $500, month 2 saving $750, month 3 saving $850... etc. etc.)

Credit score of 700+

50 books read on various subjects like economics, business, finance, entrepreneurship, investing (stocks and real estate), etc.

From there, you will be in incredible position to house hack and set yourself up for life.

Sarah Zdanowski · Answer

@Edrei Alaban you should join Sheeks Freaks! It’s a mastermind group for young investors under the age of like 25! Message me for details on how to join, or look it up on insta! Dan Sheeks runs it

Theresa Harris · Answer

It is great that you are thinking of this at your age.  You've already set yourself a goal and decided what you want to do.

You are going to need to build your credit.  This means getting a credit card and using it responsibly-don't make purchases that you don't need, but use it a few times each month to buy things that you'd normally pay cash for and pay it in full every month.

Start saving and researching costs of properties.  You will need more than just a down payment.  There are closing costs and you want to make sure you have money for the unexpected repairs as well as the expected maintenance.

Decide w

Joshua D. · Answer

If I was you I would figure out how to quickly save 10k. I absolutely love no money down investing but that does NOT mean you should buy property with no money! Broke people should not own realestate.   Pick up 2 extra jobs, move to a cheaper (or free) housing situation and live like a pauper (this is temporary sacrifice for Massive long term gains). While you are working build a relationship with the best agent in town and tell her what you are trying to do. Low money down house hack. Make sure you have listened to at least 100 podcast episodes and internalize the information. It helps when things get tough.

Good luck to you! You CAN do this it just takes sacrifice.

Edrei Alaban · Answer

Thank you so much for your advice! I really appreciate it!

Ronald Allen Barney · Answer

Find a few house-hackable duplexes in the area you want to live and get an average asking price.  Take 3.5% of that for the FHA down payment.  Whatever that down payment was, add $20k to it for closing costs, rehab costs, and bid war ammo.  That is the cash you will need to save up.  Credit scores above 580 will primarily drive your interest rate moreso than being able to get a loan at all, and if you have no debt and good payment history on at least a few things you're probably already above 580.  If you have no credit history at all then yeah, get that built up so you can clear the FHA credit score hurdle.  The better the credit is the better of a rate you can get which will also lower your payments, making the house hack more hacky.

How to start with no money or debt?

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