Can An 18 Year Old Buy A Multifamily?

Question

Soaking up all the awesome information on BP lately and have decided that I want to actually get in the game vs. sitting on the sideline. So, at my age can I actually buy a duplex/triplex? I don't really have a credit built up. What would be the best way to finance it? I have some decent money saved in the bank that I could put as a down payment, or is there a 0 down loan that'd be better? Just wanting to take some action and actually buy a property now and needing a little guidance in getting started. Thank you for your time!

Jon Lee · Answer

Hi @Devyn Grillo...you absolutely can purchase at your age....I have a very wealthy friend of mind who purchased his first property at 16! There are so many ways to purchase property that don't require traditional financing that anyone can get in the game, even if they don't have tons of money in the account or the best of credit. I recommend three things:1) Go find local investor groups in your area and get in front and network with folks who are making things happen in your local area.2) Get educated on the fundamentals of investing. The three largest parts of the fundamentals are Mindset; talking/communicating with people (sales skills); and knowing financing (both traditional & creative financing).3) Take Massive Indiscriminate Action! There is only so much reading of blogs & books to do before you get out in the field. The investors I know that have had the most success are those who took action until the results started coming in...and then they never stopped taking action!Hope this helps you to get moving! Go out there and get it at 18!

Victor Gutierrez · Answer

Hi if you have not credit history you can buy a house, people have more issues when they have bad credit what you gonna need is the two years of w-2. And you are in a good position if you have money save. Go for it bro congrats. I'm 24 I wish I would've think about buying a house when I was your ages.

Thomas S. · Answer

You can you only need three things.1) high credit score2) minimum two years in a good paying job3) cash for the DPSame requirements as everyone else.

William Murrell · Answer

Absolutely you can buy one. Hopefully you have income, because that's more important than your age. Banks will want to see that you have enough money to cover the debt service. If you can afford it, that's a very smart start because you can live in one unit and rent out the other unit (s). Then the tenant will pay your living expenses and help you save up for the next one. It's also a lot easier to get financing for houses you intend to live in. There are programs with low or no money down that you may qualify for. Good luck!

Leona N. · Answer

Good for you! I was 20 when I bought my first place, wish it had been sooner and a house hack though. I had a decent job and a 15% dp but I did it on my own without a co-signer or much of a credit history. I'm not sure if you have mortgage brokers down there but that's who found me a bank that would give me the mortgage. Good luck.

Dylan B. · Answer

@Devyn Grillo, @Aaron D. Beat me to it. You absolutely can at 18 and I would recommend you go for it! There are so many benefits to getting started that early. Along with buying a duplex, your tenant on the other side will essentially end up paying for all expenses, you could also have buddies live with you in your unit and you can charge them rent as well. As for financing, with you having little to no credit, I recommend you build up your credit, via take a $1000 loan from the bank for 1 year and repay that for a year. Also get a credit card and start charging all your expenses on the credit card and just pay the statement balance off at the end of the month so you will not have any interest charges, this will build your credit as well most credit cards will give you 1.5% cash back on all purchases. If you have someone, such as a parent/relative/close friend that has well established credit and good job history that will co-sign with you on the mortgage. Or you can also get a local investor to partner with you. Shop around at different banks and see what they have to offer. Best of luck!

Aaron D. · Answer

So, at my age can I actually buy a duplex/triplex? I don't really have a credit built up. What would be the best way to finance it? I have some decent money saved in the bank that I could put as a down payment, or is there a 0 down loan that'd be better?Technically you could, but it would be hard, which is why many people don't. As an 18-year-old they are focused on college, dating, and other things that teenagers do. The only way you could do it is if you bought with a cosigner/investor or bought an owner financed property. I think the best way is to do it through a partner/investor. Is there a 0 down loan for a duplex? There is a 5% down loan for an FHA property if you live in it. Again, you need a cosigner because you have no credit. Lenders want 2 years of W2 Income, a minimum credit score of 600, stable work history, etc. Lenders are very strict after 2008 and every time I buy an SFR it feels like I am put through the wringer with the lenders. They want to know all accounts and all transactions that you did in the past 2 months. If you could find someone that is willing to purchase a home with you at your age, then you are very resourceful and lucky. Most kids are worried about college, school, dating, their future. I was your age once and wanted to buy at 18 as well - this was in 2005. I was unable to do so due to so many things going on. I think you should get your house in order. Build up your credit, career, and other things, then buy real estate. I have a hard time thinking that one could go into this without family members if they have no credit or cash. Real Estate is a very expensive asset class. There are all kinds of fees that you have to pay at closing with a lender.

Michael Lucero · Answer

Of course you can, you are a legal adult. Even if you weren't, such as 16, you could buy property if you had enough money.

David Faulkner · Answer

The real question is are you really ready to buy a property? ... the requirements mentioned by others about credit, income, and down payment are true enough, but what I'm emphasizing is the underlying reason that banks require these ... have you mastered your personal finances? If so, and you meet the requirements, you are ready. If not, then take the time to learn that foundational skillset first. I've met 50 year olds that are not ready to buy a property and likely never will be ... by the same token, I'm sure there are also some 18 year olds out there that are ready. Do you regularly save? That is, are you able to track and control both your income and expense, and regularly enforce that your expenses are lower than your income? If so, then you will naturally tend to meet the bank's requirements, which is what they are designed to test for. Are you responsible enough to make careful and conscious spending decisions and take good care of your possessions, or do you just impulsively buy them, trash them, and then go out and buy more once they get worn out and you get tired of them and want for something new? ... buying a property is just the same as personal finance ... it is taking care of your possessions and managing income and expenses, it is just done on a larger scale and with financial leverage (debt) ... so better to be sure you master those financial basics first while the stakes are low, then and only then buy a property.

Michael Lucero · Answer

Lol