Hello everyone. My name is Ryan and I am currently 18 years old. I'm studying finance next year in college, but I want to get ahead financially as early on as I can. I would love some advice about how I can set myself up for financial freedom in the future through real estate investing as well as wealth building. I understand a lot of these personal finance topics are not taught at universities, so some advice for my future would be much appreciated!
Ideally, I can make my first real estate investment within the next 5 years.
@Ryan Schnitzler Get a job while in college and save up and buy your first rental. I bought my first rental at 19 years old while washing dishes at a restaurant. I didn't need a co-signer either. Assuming you don't have credit, get a credit card and work on building up credit to qualify you for a loan. Hold that job for two years and save up money to show income. Conventional loans require two years of employment history. You could always get your journey started off with an owner-occupant duplex while still in school. Buy a duplex, rent one side occupy the other and rent all the other rooms out to your college buddies to pay for the mortgage, so you are living rent-free, and if it's a good deal, it cash flows.
@Ryan Schnitzler Welcome to BiggerPockets and congrats on getting ahead of the game in terms of learning about finance (both corporate and personal finance from the looks of things).
You should connect with @Dan Sheeks who works with a lot of young folks like yourself!
Ok Ryan, so what you will want to do is build credit while in college. That would be my first step. Prepaid credit card, prepaid loan, within a year or two you will have established decent credit. Now that whole ball is rolling you will need to set your sights on how you will acquire this property in 5 years. The next thing I would focus on is saving all the money I can to put towards a down payment on that property you want. Now, a conventional mortgage is going to want to see two years of income, so you will have to figure that out. Creative financing may be in order, or you may have to wait until you get two years full time under your belt.
That's what my brain puts together for your situation. Let me know if you have any questions.
@Ryan Schnitzler Get a job while in college and save up and buy your first rental. I bought my first rental at 19 years old while washing dishes at a restaurant. I didn't need a co-signer either. Assuming you don't have credit, get a credit card and work on building up credit to qualify you for a loan. Hold that job for two years and save up money to show income. Conventional loans require two years of employment history. You could always get your journey started off with an owner-occupant duplex while still in school. Buy a duplex, rent one side occupy the other and rent all the other rooms out to your college buddies to pay for the mortgage, so you are living rent-free, and if it's a good deal, it cash flows.
Congrats on being here @Ryan Schnitzler! I think a great place to start would be the book "Rich Dad Poor Dad"...it'll give you a great foundation from which to build off of!
Congratulation Ryan! Taking the first steps into building wealth through real estate investing takes courage at such a young age Bravo! I agree with everyone who advised to build credit and show steady income through work history! Buying a duplex or triplex is a great way to make good income while allowing you to live in one of your units as an owner occupant. If you ever want to invest in California, I'm here to help.
Awesome, Ryan. You are at the right place. I definitely would reccomend soaking in all the info from the podcasts. Two good ways to get into real estate investing are house hacking and finding cash flowing rentals. I am actually building a tool that will help automate the calculations and analysis in finding a cash flowing rental. If you want to stay in touch you can visit homescope.io
Below is my generic advice. If you insist on spending money on a college degree, I recommend you do whatever you can to purchase a property now that you can house-hack with other college students. That will give you a couple years experience without a ton of risk. Without knowing you personally, I recommend you consider dropping out of college and getting a W-2 job in property management. You'll earn a living and learn more, faster. Knowing how to manage properties well is key to success. At the same time, you can educate yourself for free on how to find and buy deals.
I recommend you build a strong foundational understanding of real estate investing.
2. Get your finances in order. Get rid of debt, build a budget, and save. The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money. A wise investor will not try to get rich quick with shortcuts. If you can't keep control of your personal finances, you are highly unlikely to succeed in real estate investing. Check out my personal favorite, Set For Life by Scott Trench , or The Total Money Makeover by Dave Ramsey.
3. As you read these books, watch the biggerpockets podcasts. This will help clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.
4. Now you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books for this or you can learn by watching podcasts, reading blogs, and interacting on the forum. There is a handy search bar in the upper right that makes it easy to find previous discussions, blogs, podcasts, and other resources. Biggerpockets also has a calculator you can use to analyze deals and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, it will be much easier to recognize a good deal when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.
5. Study the market. You can learn to do this on your own or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR that works with investors and knows how to best help you.
6. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. The truth is, you could read 100 books and still not know enough because certain things need to be learned through trial-and-error. You don't need to know everything to get started; you just need a foundation to build on and the rest will come through experience and then refining your education.
You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g. "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is a pretty forgiving world and the average person can still make money even with some pretty big mistakes.
Congrats Ryan, Just like everyone indicated. Focus on getting a job and save as much money as you can, start working on establishing your credit. Make sure you pay your bills including your credit card on time and try to keep your credit under 40% usage. Also read "Rich Dad Poor Dad" and the "BRRR by David Greene" also listen to the Rookie Podcast.
Agree with the above - make your very first investment in the books referenced. Set goals, reach them and then set bigger goals. You have the luxury of starting this early. Set a goal to read Rich Dad and set for life in the next week. You'll feel great about accomplishing your first goal on the road to investing. As those books start to shape your thinking, set your next goal - at first you'll be the train just slowing starting - eventually you'll have some serious momentum. Borrowed the train analogy from one of my favorite BP podcasts.
Hello everyone. My name is Ryan and I am currently 18 years old. I'm studying finance next year in college, but I want to get ahead financially as early on as I can. I would love some advice about how I can set myself up for financial freedom in the future through real estate investing as well as wealth building. I understand a lot of these personal finance topics are not taught at universities, so some advice for my future would be much appreciated!
Ideally, I can make my first real estate investment within the next 5 years.
Thank you.
Hi Ryan,
I love your ambition! I always recommend the book “Rich dad, Poor dad” by Robert T. Kiyosak to anyone who is starting out. Start listening to the BiggerPockets podcast starting at the very beginning. Start growing your network, look on Facebook/BiggerPockets for different events, find a mentor who is doing what you want to do, and get to know the local lenders/brokers. Ask your family or those who are close to you to invest with you. What if your family bought a house close to campus and you managed it?
If I had to start all over again, I'd look to acquire a 2-4 unit property with an FHA low-down payment mortgage.
Getting it under market value would be a bonus.
So, would using an FHA 203k renovation loan, which would allow me to buy something unqualified for a standard mortgage, which would weed out a lot of competition and push the price lower.
Hopefully, I would increase the value of the property in 1-2 years and be able to refi out of the FHA mortgage. I'd also learn a lot about maintenance and managing tenants.
Then, with my hands-on experience, I could decide if I wanted to repeat the process or target 5+ units - which my experience would help with lenders.
If I had to start all over again, I'd look to acquire a 2-4 unit property with an FHA low-down payment mortgage.
Getting it under market value would be a bonus.
So, would using an FHA 203k renovation loan, which would allow me to buy something unqualified for a standard mortgage, which would weed out a lot of competition and push the price lower.
Hopefully, I would increase the value of the property in 1-2 years and be able to refi out of the FHA mortgage. I'd also learn a lot about maintenance and managing tenants.
Then, with my hands-on experience, I could decide if I wanted to repeat the process or target 5+ units - which my experience would help with lenders.
Good luck with whatever you decide to do!
I am also just starting out and looking to buy my first property while in college. What are some ways I could qualify for this FHA loan if I currently have no w2 income?
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