No Credit History

[Michael Magro]

I'm 18 and have no credit history. I've only worked 2 part-time jobs so far and am starting a new one in July. I have sufficient funds for down payments but I won't be able to get any mortgages and I don't know how to escape this dilemma.

What is the most efficient way for me to start buying cheap properties?

[Jean Bolger]

Well, you'll want to start building a credit history, for one thing. If you have some money you could look in to a "share secured" loan at a credit union. Basically, you deposit your money with them, and then you borrow against that deposit. The funds you have deposited are locked up until you repay the loan. It sounds kind of stupid, I know! paying interest to borrow money you already have... but it's specifically designed for building or rebuilding credit, and the interest rates are extremely low. It goes on your credit report as an installment loan. It may be worth the small cost to you.

There are of course methods for buying and selling real estate without involving traditional banks, but if you want to be a successful investor you'll need that good credit at some point. The earlier you start thinking strategically about it the better!