19 Years Old, Sophomore in College, First Rental/Investment Property

[Jacob Shoesmith]

Howdy! My name is Jacob and I'm looking to invest in my first property! I've read a few books and I've done a lot of research. There are so many factors to consider but I know some people can jump on their first investments without too much worry. I'm 19 years old and I'm a sophomore at Texas A&M. Gig'em. All I want to do is own and manage rental properties. There is so much potential and passive income available to be retired/comfortable at 25-30! It may sound crazy but I know it is very doable and possible. I have a couple questions that would really help me out if answered: 1. Financing for my first investment? Bank, lender? Where to find them? Best types of loans? 2. Should I invest in Houston (hometown) or College Station? I'm in College Station 8 out of the 12 months. Both maybe? 3. Any personal stories of success (or failure) at a young age? I appreciate all the replies. Y'all are awesome. Looking forward to growing with this community. Thanks and Gig 'em!

[Trey Watson]

I went to Sam Houston but lived in College Station the entire time. One of my good friends there used his brother (who already had a job) to co-sign through a conventional bank (chase bank) on his property. He didn't need any credit or ownership history because his older brother was signing who had already been working in the real world for a while. My friend lived in one room throughout school and rented out the others. It was essentially turn key and did not need much work- which is what made it possible to buy through a conventional bank. If the property had needed a significant amount of work, he would have needed to use hard money. The reason is, if a property has significant enough issues such as major plumbing or foundation or an old leaky roof, a conventional bank wont lend on that because it wont pass inspection.

If you're looking for something to fix up, hard money is your option. Once you fix it up, most hard money companies can refinance you into a conventional loan which will normalize your interest rate.

If you're looking for turn-key, the bank is the way to go and there is no need for hard money because hard money is meant for something that needs a construction escrow. A simple low fixed interest rate through a bank is ideal for a long term rental. 

As far as finding a loan that a 19 year old college student will qualify for- you pretty much need a cash loan from family/private lender or you need a co signer who has income history and decent credit. Once you have one property under your belt, it gets easier and you should be able to buy on your own.

I hope this helps.