House Hack at 18 is it Possible? Maybe Even Under 18?

Question

I'm very new to the real estate scene, I turned 17 about 3 weeks ago but want to get my first property very shortly after 18 maybe even 17 if possible. Considering I don't plan on going to college after high school to wait another 4 years to get a good paying job (I plan on being a real estate agent for 5-10 years) how would getting a loan work considering I don't have any real steady flow of income from the past two years that is significant along side the fact that I have 0 credit history, but around 15k in savings. Would it be possible to cosign alongside family and own the property in my name and start to build up a loan history and credit? Sorry if this may have been weirdly worded and confusing if you have any questions let me know in the comments below. Thanks.

Melissa Hartvigsen · Answer

Jared,

What a great plan!  You would not be able to obtain a loan on your own until you meet the following:

1. Are at least 18 years old.

2. Have a steady income for at least 24 months.

3. Have a credit score of at least 640. (The higher your score, the better your interest rate will be).

Or you need to have a qualified co-signer. Generally speaking, the bank providing the loan will require the co-signer to also be on the title to the property with you.Here is some basic advice:

1. Becoming a realtor. Most realtors are self-employed, and write off a lot of their expenses. Writing off everything you can might be tax smart, but does not help you qualify for a loan. I would suggest getting an entry level W2 job at a local real estate brokerage. You can learn a lot and possibly have your license paid for. This can be a reception job, marketing job, transaction coordinator, realtor assistant etc.
2. Build your credit. One way to instantly get credit is to have a responsible adult with good credit and responsible credit card usage add you as an "authorized user" to their account. If this option is not available to you, you can get a secured card through your bank or credit union. They basically have you set up a savings account that will pay the bank if you default on the credit card. After 6 months to a year, you may be eligible for a regular credit card, and then they would close the account and send you the savings deposit back.
3. I recommend reading Dan Sheeks "First to A Million: A Teenager's Guide to Achieving Early Financial Independence. It will give you a more in-depth plan on all of the above.

Good luck! I think it is brilliant to start so early! :)
Melissa

Mathios Yonan · Answer

Check out the NACA program or a DSCR loan, I am about to turn 18 and was in your position about a year ago. Figure out what you need to do to qualify for the program/loan and see if you could make it work.

Kevin M Kiesel · Answer

For any loan information, I would say it is best to contact a few loan officers or bankers and have them give you what they can offer. Don't just go with the first offer, part of making these deals is getting out there and talking to the people that work in that field on a daily basis. I have been out of the loan business for a little while now, that I wouldn't want to give you any definitive answers. If they can't give you an offer, ask what can you do to be able to qualify for a loan.

Phillip Austin · Answer

Dude?! @Jared Dewey I have to say I'm super impressed! About to turn 18 with $17K in savings and want to get into real estate investing. Way to go man!

Kevin M Kiesel · Answer

I completely understand. I know when I would sell mortgages, I would use the lowest credit score of the people on the loan. If one of the people might be have a lower credit score, they can work on their credit and when they refinance in a year or so, that is when the lower credit score person should be added back. You will pay high interest if you try to stay on the loan. There are ways to have your name on title of the home, I would highly suggest a contract between all parties involved.

That will be great! Save on that commission! Good luck with all!

Jared Dewey · Answer

If I'm able to find a qualified cosigner then would that build up my loan history with the bank? Finding a qualified cosigner would also allow me to qualify for a property even with myself having minimal credit history is what you are saying?

If the cosigner were to not live on the property and had another residence separate to this one would I not be able to qualify for an FHA loan or just a conventional loan?

Account Closed · Answer

Build your credit up. The earlier you start the better. Try and get your own account, and if not, get a card in your name under your parents account, if possible. Every dollar you spend in cash or with a debit card is a wasted opportunity.

Kevin M Kiesel · Answer

Yes, there would be no reason to have you on the loan if you are not able to qualify, unless your income is the source that is being given for your debt-to-income ratio.

Have you thought about getting a real estate license?

Kevin M Kiesel · Answer

I would contact a bank or mortgage company to see how they will handle your situation. Oh yeah, since the consigner wont be living in the home, then you will need to be on the loan too. 203k loan was difficult to qualify for. Just charge figure out the correct amount to charge for rent, when it comes to high interest. I would have to figure out which route will best fit my goals and situation.

Have you worked in property management?

House Hack at 18 is it Possible? Maybe Even Under 18?

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