What should i do?

Question

Hi! I am Mario, 15 year old, from Albania. I am highly interested in RE and entrepreneurship, and I have been learning them for 2 years. I have recently opened a digital marketing agency and for now I am focusing on finding 1st client and trying to build some capital. But I also have a burning desire to start my RE journey next year with one rental property (multifamily), when I turn 16. All i have that i can invest right now, are $3,000 from my savings. What do you recommend me to do?

Michael Paling · Answer

Hey Mario,

First off, way to go at getting this all started so early! I wish I was as smart as you at that age. If I was you, I would be trying to connect with local investors. I see you've been asking other questions here on BP, so keep doing that, but also find some local investors to chat with. If you're able to make a good relationship with someone, maybe there's potential to partner with them? One hurdle that you'll deal with is being younger than 18, because I don't think you can legally purchase property until 18. You could talk with your parents about working with them to buy as well.

Other than that, keep saving and building up your marketing business. If $3k is your entire savings at the moment, you should really focus on building that up, because real estate investing is not a cheap business, and you need reserves on top of purchasing costs (down payment, closing costs, rent ready costs, etc.). Don't rush this and learn to enjoy the process and learning. You've got so much time ahead of you, but 10 years from now, you will look back and thank yourself.

Account Closed · Answer

I agree with Michael's comment above.

Well done for having this mindset early! Keep learning and surround yourself with people who have what you want.

Good luck!

Nathan Gesner · Answer

Keep saving, educate yourself, build a plan, and be ready to jump in once you have enough money. You need enough money to buy an investment, but you should also have a reserve when starting out. It's not uncommon to have some large financial losses the first year of ownership. Having a reserve will save you from financial ruin.

1. Start with BiggerPockets Ultimate Beginners Guide (free). It will familiarize you with the basic terminology and benefits. Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turner or The Unofficial Guide to Real Estate Investing by Spencer Strauss.

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 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.

What should i do?

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