How could I start investing in rental properties at 20 years old?

Question

How could I start investing in rental properties at 20 years old? I also haven’t been at my job in the same industry for two years to qualify for some loans.

Monica Breckenridge · Answer

I started when I was 25 years old.  I purchased all my homes with no money out of pocket. I was broker when I was 25.  You can buy homes Subject to the Existing Financing that way you don't have to get a loan. You simply take over mortgage payments that somebody has in place.  I just posted a blog post on this if you want to check it out.

Wendy Patton · Answer

@Anthony Steele I also started when i was 21 years old. I bought my first home and house hacked it without knowing what that was - but i rented out 2 of my bedrooms and paid for the entire home.  I had ZERO savings and had to borrow the down payment (which now must be seasoned in your account or borrowed with FHA - which might be hard in the area you live in) - During this "down time" aka "kick some butt time" you can be learning creative ways to purchase:   ie Lease Options, Subject Tos, Wholesale, Partnering, getting private lenders, etc.   Luckily there are tons of great ways to get into real estate without using money or your own credit.  Starting real estate investing when you are young and broke is one of the best ways in my option, because it makes you have to learn creative strategies.  If you start this business with tons of cash, then you don't have to learn some of the most important aspects of investing.   Enjoy the journey and hit it hard right now while you are young and there is not much to lose.  Also hit it hard now when your state is shut down.  Don't waste any of this valuable time you are given.

Alex Olson · Answer

@Anthony Steele You are doing the right thing - find a duplex, triplex, four plex and buy it using an FHA loan. You owner occupy that place and have the rest of the 3 units pay for your mortgage (probably more) and then, 1-3 years later you keep doing it until you are tired of having neighbors and then you continue to build your real estate investments. The key is doing an FHA loan on a 2-4 property. Around 3% down is all you need.

Coral Hernandez · Answer

How to Locate a Profitable Fix & Flips:

The Key to finding profitable deals is knowing not where to find the deal, but rather what Number makes it a good deal. Knowing your math is the Number One important factor to finding a good to great deal.

With that being said:

How to Locate a Profitable Deal!

• Wholesaler –Individuals or Companies that have Properties Under Contract. They then sell the rights to purchase it to Investor or Buyer
• Individuals or Companies that have Properties Under Contract. They then sell the rights to purchase it to Investor or Buyer
• · Real Estate BrokerThey represent multiple “Sellers” of properties. They have relationships with Owners and Investors directly, in which they are entrusted to Market and Sell their houses.
• They represent multiple “Sellers” of properties. They have relationships with Owners and Investors directly, in which they are entrusted to Market and Sell their houses.
• · “In Pocket Deals”Essentially “Off Market Deals”, or Properties that you can purchase before they hit the open market. This can occur, usually through a family member or friend that is or knows someone that is getting ready to sell and you can get it at below market price
• Essentially “Off Market Deals”, or Properties that you can purchase before they hit the open market. This can occur, usually through a family member or friend that is or knows someone that is getting ready to sell and you can get it at below market price

• Individuals or Companies that have Properties Under Contract. They then sell the rights to purchase it to Investor or Buyer

• They represent multiple “Sellers” of properties. They have relationships with Owners and Investors directly, in which they are entrusted to Market and Sell their houses.

• Essentially “Off Market Deals”, or Properties that you can purchase before they hit the open market. This can occur, usually through a family member or friend that is or knows someone that is getting ready to sell and you can get it at below market price

• · Direct Mailing & Marketing (social media, SEO, Google Ads)Another way to obtain Deals Off Market or Below Market Value
• Another way to obtain Deals Off Market or Below Market Value
• · Driving for DollarsA technique where you drive around in neighborhoods that you are looking to invest in, and you look for Distressed and/or Value-Add properties. Then, you creatively find a way to Approach and ask to Buy the House from the Owner (we’ll cover this in a future post)
• A technique where you drive around in neighborhoods that you are looking to invest in, and you look for Distressed and/or Value-Add properties. Then, you creatively find a way to Approach and ask to Buy the House from the Owner (we’ll cover this in a future post)
• · AuctionsPretty straight forward, Auction Houses place “Distressed Properties” up for bid. These houses can often time be Sight Unseen and can be High-Risk High-Reward for the Non-experienced Investors
• Pretty straight forward, Auction Houses place “Distressed Properties” up for bid. These houses can often time be Sight Unseen and can be High-Risk High-Reward for the Non-experienced Investors
• · Local R.E.I.A. MeetupsCollection of like-minded individuals in the Real Investment Field, who gather to network and discuss potential deals
• Collection of like-minded individuals in the Real Investment Field, who gather to network and discuss potential deals
• · Online Blogs and Networking (BiggerPockets, Linkedin, etc…)Same as above
• Same as above
• · Bank Asset Managers for REO propertiesProperties that are “Distressed” and Banks want/need to get off their books
• Properties that are “Distressed” and Banks want/need to get off their books

• Another way to obtain Deals Off Market or Below Market Value

• A technique where you drive around in neighborhoods that you are looking to invest in, and you look for Distressed and/or Value-Add properties. Then, you creatively find a way to Approach and ask to Buy the House from the Owner (we’ll cover this in a future post)

• Pretty straight forward, Auction Houses place “Distressed Properties” up for bid. These houses can often time be Sight Unseen and can be High-Risk High-Reward for the Non-experienced Investors

• Collection of like-minded individuals in the Real Investment Field, who gather to network and discuss potential deals

• Same as above

• Properties that are “Distressed” and Banks want/need to get off their books

Point Blank you have to be creative and utilize a collection of different strategies, such as the ones mentioned above, and see what Blend works for you.

Anthony Steele · Answer

@Monica Breckenridge

Thank you and I will

Anthony Steele · Answer

@Chib N.

Thank you

Chib N. · Answer

@Anthony Steele

Smart move! Congrats on wanting to start investing early! It will pay off.  I started early as well but started with single family properties. If you could get your hands on multi-units from the get-go, go for it!

Also, as a young landlord, sometimes tenants want to take advantage.  I learned the hard way early so watch out for that, and be stern (the eviction letters going asap when their rent is past due works wonders!)

Good luck!

Anthony Steele · Answer

@Alex Olson

Smart. Thank you so much

Through the process what would be a good way to find an amazing deal? A real estate agent? Once I found an agent and found a property I would then get it under contract? Then when it comes to due diligence how do I go about that?

Thank for writing and helping out

How could I start investing in rental properties at 20 years old?

Most Popular Reply