19 Year old investor searching for financial independence

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19 Year old investor searching for financial independence

Austin Adee
Portland, OR · Member since 2017 · 2 posts · 0 votes

Hello members of BP,

(Skip to Bold to get straight to questions, The following is my story thus far.)

All my life i've been told two things get a solid job and be content. My name is Austin. I'm 19 years old and I know that I want more from life than what my parents have. Living off the government or living from paycheck to paycheck is not for me.

Once I got out of highschool I knew that the job world was fast approaching, so I decided to pick a career that would earn me a good sum of money. So I began looking into becoming a nurse. I did much research as I normally do, and came to find that not only would i have to accumulate a huge sum of debt over many years of schooling, I would also work many long days spending little time with friends, family, and traveling. Once again this was not for me.

Upon researching I somehow stumbled upon a youtube channel called Fight Mediocrity, This channel showed me the possibility of financial independence. I was so excited. I honestly couldn't even grasp the idea at first. This channel recommended me two books, The Richest man in Babylon, and Rich Dad Poor Dad. I bought both and read them shortly after. Rich dad showed me I didn't need A college education to become wealthy, and Babylon Reinforced my ideas about saving. That's when I became involved in the stock market. following Warren Buffett's model of long term holdings and dividend investing.

At this point I am working two jobs, around 45 hours a week, to generate some capital for myself. I am also enrolled At CCC because I couldn't pass up the wonderful opportunity of the Oregon Promise which is paying me to go to school.

25% of my checks go to the stock market, 25% Goes straight to my savings account,  and the other 50% is used for Bills, food, and fun when I can find time. So far I've built my portfolio and savings to about 8,000 combined. And that's where I am now. I've looked into real estate and it seems like A great move, It seems that it could be far more profitable than the stocks if done right. I just Don't know where to start.

Questions

I know that I want to get involved in Rental properties and house hacking seems to be a great way to get into it. But I have no Idea how to go about buying my first multi family home. Between my two jobs I'm making about 1200 a month after tax. This amount is far too low to jump into a deal, plus I only have 8,000 to my name. So I don't know if I should work at getting a better paying job to be able to afford a property, or what. What would you recommend?

My second problem is that I don't really know anyone involved in real estate. And even if I did I wouldn't know who I need to know. I understand that any Real Estate Investor needs a team including, an agent, an attorney, Possibly a repair company, or some sort of property management. But that's pretty much it. I definitely have some holes in my education. And I'm always working to improve that.

Lastly I'm not sure on how to go about financing a home. If a 19 year old with two low paying jobs walks into a bank looking for a lone, He's not going to walk out with one that's for sure. I Know very little about hard money lenders or even how to go about the paperwork. 

Let me know your thoughts on any, or all of this. I am looking forward to any replies I may get as this is my first post and I'm truly seeking knowledge. Thank you very much for your time. 

Sincerely,

Austin Adee

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Kim Younkin
Real Estate Marketing Professional · Columbus, OH · Member since 2015 · 299 posts · 125 votes
9y

Hi there @Austin Adee...you're the second 19 year-old I've responded to in the last 24 hours because your drive and ambition are very impressive and I want to pass on some thoughts. The first thing I would do if I were you is go to a local real estate investors' meeting as soon as you can. You'll meet people you can ask these questions to in person, and really, a community is what we need to help us succeed in whatever we do. If you live in Portland, go to northwestreia.com and look at their meetings -- it looks like they have a March meeting at a Doubletree Hotel in Portland. Also, Google "Portland OR REIA groups" to find other groups. Sometimes these groups are membership based -- but worth every penny for what you learn and who you meet! -- but here in Columbus our group lets people come to a first meeting for free. Then there is another group here that's always free, so research all those you find. And then just go! I was in mine here for over a year and met all kinds of people at all stages of investing, as well as vendors, lenders, etc.

As for your house hacking idea, which is a fantastic one, there are loans you get as a first time homeowner (FHA) and loans you can get specifically to house hack. Find a "community bank" -- avoid large banks like 5/3, Chase, etc. -- and just go in and talk to a lender and tell them everything you said here about your finances and what you hope to do. Don't ever count yourself out without talking to people first - you'll be amazed at that you'll find.

Oh, also right now I'm reading The Power of Habit by Charles Duhigg -- awesome reading if you're planning to be an entrepreneur who reports only to themselves and needs good self-discipline. 

And listen to podcasts and read everything here on BP. Best of luck to you! - Kim

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  • Kim Younkin
    Real Estate Marketing Professional · Columbus, OH · Member since 2015 · 299 posts · 125 votes
    9y

    Hi there @Austin Adee...you're the second 19 year-old I've responded to in the last 24 hours because your drive and ambition are very impressive and I want to pass on some thoughts. The first thing I would do if I were you is go to a local real estate investors' meeting as soon as you can. You'll meet people you can ask these questions to in person, and really, a community is what we need to help us succeed in whatever we do. If you live in Portland, go to northwestreia.com and look at their meetings -- it looks like they have a March meeting at a Doubletree Hotel in Portland. Also, Google "Portland OR REIA groups" to find other groups. Sometimes these groups are membership based -- but worth every penny for what you learn and who you meet! -- but here in Columbus our group lets people come to a first meeting for free. Then there is another group here that's always free, so research all those you find. And then just go! I was in mine here for over a year and met all kinds of people at all stages of investing, as well as vendors, lenders, etc.

    As for your house hacking idea, which is a fantastic one, there are loans you get as a first time homeowner (FHA) and loans you can get specifically to house hack. Find a "community bank" -- avoid large banks like 5/3, Chase, etc. -- and just go in and talk to a lender and tell them everything you said here about your finances and what you hope to do. Don't ever count yourself out without talking to people first - you'll be amazed at that you'll find.

    Oh, also right now I'm reading The Power of Habit by Charles Duhigg -- awesome reading if you're planning to be an entrepreneur who reports only to themselves and needs good self-discipline. 

    And listen to podcasts and read everything here on BP. Best of luck to you! - Kim

    3Reply
  • Austin Youmans
    Investor · Vancouver, WA · Member since 2014 · 359 posts · 143 votes
    9y

    @Austin Adee, The truth is that you don't know what a bank will give you until you try. The worst that can happen is that they saw know and you ask why then you have a direction to go. The best that can happen is that they say yes so why not go in and check. 

    Not sure where you are looking to buy but have contact info for a mortgage broker in Vancouver if you are interested. 

    FHA house hacking would probably bee your best bet. you said you had 8,000 to your name so at a 3.5% down payment you could get around a $200,000 loan if you credit is good. You will need some extra cash for the buying process other than just the down payment but talk to a lender and just see what they have to say.

    It will take a while to find a deal as well so don't loose hope and create a habit of finding deals and offering on them.

    Let me know if you have any other questions.

    1Reply
  • Jeff Dulla
    Lender · Western Springs, IL · Member since 2015 · 472 posts · 245 votes
    9y

    @Austin Adee - you sound more like a candidate for some of the Non-Prime/Portfolio products certain lenders are rolling out. You may not be able to go the path of a traditional bank. Or even FHA.

    I have had two or three different companies, legitimate wholesale lenders come through my office the last couple months presenting newer loan programs. One in particular would be interesting for you.

    The program in mind approves you based on the gross monthly income you can get on the proposed property. They will use a rent schedule on the appraisal to assess gross rents. Once that is established, that depreciate the gross rent by 10%. As long as that rent figure fully covers PITI (principal, interest, taxes and insurance), then they will qualify you. Regardless of your actual income.

    Like with any Non-Prime/Portfolio (or private/hard money loan), rates are going to be higher and shorter term. You could expect rates to start in the mid 6's on something like this, all the way up through mid 7's. If you could find something that works from a cash flow perspective, that may be an option. 

    1Reply
  • Steve B.
    Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    your asking how to invest your passive earnings funded by your meager active wages.  So your going about this backwards.  Your first priority is getting a well paing job based on a marketable skill set.  Your not going to get rich with brilliant investments of pocket change.

    1Reply
  • Aaron Z.
    Investor · Virginia Beach, VA · Member since 2015 · 83 posts · 34 votes
    9y
    Austin Adee I concur with Steve B. Spend some time building some skills that will command a greater income. That could be a trade skill or another type of in- demand skill that doesn't require a long degree. There are classes at your community college that could translate into a good paying hourly job like CAD for example. MMM (Mr Money Mustache) has a couple posts on 50k/yr jobs that don't require a degree as well. Look that up. The time you spend doing this will be well spent and will position you much better for RE investing than almost any other action. You are young- be open to moving out of your town to where those jobs are. Keep your expenses low, read, listen to podcasts, and look at properties in the mean time. Very quickly it will all add up to proper preparation and the knowledge and money to take action!
    2Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    9y

    @Austin Adee, I agree with @Aaron Z. If you're looking for financial independence, check out mrmoneymustache.com. He retired at age 32 and has a ton of tips for how you can do the same thing.

    I don't think he's big on real estate, but you can still learn a ton from him.

    [email protected]Podcast Guest on Show #261
    BiggerPockets
    1Reply
  • Matthew Murphy
    Investor · Rochester, WA · Member since 2013 · 221 posts · 30 votes
    9y

    @Austin Adee This is all great advice. I think it is awesome you have this interest at your age, 99% of your peers do not. Take it slow, carefully plan! Come up with a plan of action! Short, near and far goals. How can you achieve these? Definitely spend some time and soak up as much as you can on BP, and reading some books. Get involved at your local club, maybe you can network and find a mentor!

    I started young and jumped right into it, although I had a decent paying job. But lessons learned I burned myself out in a few years and had to take a break. Now if BP was around then or had I the opportunity to ask these same questions that you have (could have but young, strong and driven) I would have saved myself  many hard lessons. I regrouped and things have been better then ever.

    Best of luck!

    1Reply
  • Derrick Aragon
    Investor · Portland, OR · Member since 2016 · 213 posts · 60 votes
    9y

    I would go to a loan broker and see what you would qualify for a loan. Inwould look into buikding an adu and you are young and hope you have some friends and rent out the rooms and live for free... $500 a month each room and live like 19 year old.. You could get an abnormal cash flow. 

    If you want a carrier in real estate you could be a broker... Or if you want to make some more money learn how to sell.. Learn how to be an increasable sales person.. Sale cars or anything...

    You do need more income.. 

    You can flip stuff online buy stuff from yard sales and flip them on amazon and eBay and if you learn 10-15 category you can make side hustle money,

    Marketing if you know social media marketing you can make a lot of.money... 

    Making money is easy once you figure out what you like...

    Sales is the best skill no traditional school wil teach you.

    Read 5 books a week and don't over think things...

    1Reply
  • Austin Adee
    OP
    Portland, OR · Member since 2017 · 2 posts · 0 votes
    9y

    Thank all of you very much. All of this advice is really giving me a lot to think about.  I think my first move will be towards getting a better paying job to be able to fund my Investments while also learning at much as I can. Thank you all Again. this is very motivating and I know that my age is my greatest asset.

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