Being approved for a loan

[Keaton Walkowiak]

Hi! I am a 17 year old named Keaton and I have been learning about the real estate world for almost a year now, and I am nearing the stages of buying my first multifamily home. I am looking to buy a rental once I am 18.

 I have been asking around from bankers, agents, to my parents about how to get approved for a loan assuming I wait till I am 18 to buy. I have understood that I need a good credit score, and 2 years of w-2 paychecks to prove I'm making income. I do not have a credit card yet and I am looking for answers to a few questions... 

As a 17 year old am I able to start building credit? If so, how?

I have been told that I can have my name put on my parents card as an authorized user and then that would start building me credit, is this true? 

Any insight is appreciated immensely!

Thank you for your time,

Keaton Walkowiak

[Forrest Williams]

Good to hear you're starting out early, time is the best asset you have right now. Bezos may have billions of dollars, but no amount of money can buy another second of time. Here's how to get the best start you can.

Open a credit card to pay off every month. Lots of people open one and think, "sweet, here's $5,000." That's not what it's for. Don't use it to buy a new car or top of the line computer. Use it for normal purchases, and pay it off every month. Mine has automatic payments so I don't even have to think about it.

Get a job with a solid W-2. Banks will want two years of paychecks, so try to get a job that isn't tip based. If you wait tables, they want a lot more documentation about your income.

Learn to fix things around your parent's house. Youtube how to patch drywall, replace sinks, painting techniques, anything that will help make a house better once you're in it. The list of things that can go wrong in a house is long, but if you know a little drywall, carpentry, plumbing, and electrical, you can go a long way.

Learn your market. If you're around the twin cities, there are some good areas, bad areas, and up and coming areas (true for all towns really). Learn where you want to be and where you want to avoid. You can change lots of things about a house, you can't change anything about a neighborhood. Try to get the worst house on the best block.

House hack your first house. Buy something run down and ugly, get a couple of friends or roommates and let out the rooms to them while you fix it. Report that income, not only is it the law but it can help establish your income with the banks when you go for your next loan. This is where your repair skills come in too. If you can get a multifamily that's awesome, but those can be more expensive. But rent out every room you can for as long as you can. As soon as you start living alone, you won't want to go back to roommates.

Good luck in your journey! I've got several friends who live in Minnesota and love it there. Feel free to reach out if you want more info too.