Young Adult + 1st Property + Buying Early

[Allan Branch]

Hey, my wife and I own a variety of properties… warehouses, single family homes, self storage, commercial buildings, multifamily etc.

My son is turning 18 in December. He’s probably going to end up going to a trade school, get a real estate license, work with a local contractor to become a building contractor.

What are your thoughts about buying a property early in your life? Obviously we could help him with a down payment and cosign if needed.

What would you buy? What loan would suit the purchase

In my early 30s, I often wished my parents had told me to buy a house at 18. Not necessarily for the cash flow, but to purchase it early while prices are suppressed and built equity to later use. Well and the depreciation would have been helpful. In theory we could buy a house with him and rent it for ten years and break even, pay the debt down, build credit, and later maybe he lives there. Who knows.

Another option would be to buy a small parcel and slowly build a house with/for him and pull owner permits.

[Bruce Woodruff]

Nice of you to get him interested in RE so young, good for you! My son is in his 30s and just now getting into it (even after years of listening to me :-)

I'd say yes, get him started early......but do NOT do it for him. If he is going to do it at all, it needs to be him learning (both the good and the bad). And of course don't force him into it just to please you (I'm sure you're not)

When you verify that he is truly serious about starting the journey, I would 1) have him do an extensive goal-setting plan. Detail why he wants this and where he wants to be in X years and how he thinks he will get there. Analyze this with him and then 2) have him start bringing you properties that he has run numbers on, in a serious spreadsheet, have him sell you like he was your partner.

When you think he's ready and has saved at least some money for a DP, help him get started with a little loan/gift. I would start really simple....a little LTR house that needs a little lipstick, nothing more. Let him run this (self-manage) for a year or so and see how everybody feels about it then.

How does that sound?