16 year old getting into real estate; advice?

Question

Before anyone judges me for the fact that I am only 16 years old, I'd like you guys to hear me out. I live in an urban neighborhood in New York City, and I've gotten tired of letting the "American Dream" control my life. I've always heard that the only route to success is through doing good in school, going to a good college, all to work a 9-5 living paycheck to paycheck, left years in debt because of college. Ever since a young age, I have always wanted to be successful. "But how, and from what"? Those words are constantly in my head because I haven't even skimmed to opportunities in life that are there. Taking the traditional route is the best way to make a living but I'm planning on making a fortune, and I don't want to waste my years in school and an average job working until I'm 60, I want to start my road to success now! Real estate is the highest commodity any American can own and the best way to build capital, and as a young black woman I want to be the first in my family to own real estate and give back to my community. All that I'm asking is that if anyone see's this, that you would give me some tips on how to invest in real estate, or any tips for starting off. I'm not totally sure how this would work out, but I would work for you in any way that I could if you could teach me you ways of making cash and building credibility as a teen. I want to become financially independent and I can not think of a better time than now. I've been saving up my money, and I know for a fact I will become successful at some point in life, because I am driven and motivated to being better than my parents, so that one day I can repay everyone in my life who has encouraged me. Nothing can stop me, and from everything I've read and watched, I need a mentor of some kind to help me through this to help me achieve greatness and become smarter with your knowledge. If you would like to help me out, or give me some valuable tips as I'm sure many of you guys have, I would greatly appreciate it. I know that many of you might be snickering at what only a 16 year old kid can do, but I have the hunger of getting knowledge and coin. Thank you so much - Leah

...I know I'm not allowed to ask for mentors as this I guess I am indeed going against some of the guidelines, but I literally have no connections to anything that is going on in this area. I'd appreciate it if you work within the field of real estate you could tell me about how you got to where you are and mistakes you may have made. Anyways thank you for taking the time to read this cumbersome article. Stay safe!

...I know I'm not allowed to ask for mentors as this I guess I am indeed going against some of the guidelines, but I literally have no connections to anything that is going on in this area. I'd appreciate it if you work within the field of real estate you could tell me about how you got to where you are and mistakes you may have made. Anyways thank you for taking the time to read this cumbersome article. Stay safe!

Mark Smith · Answer

At 16 your signature is not legally binding which will be your number 1 issue.  I know at 16 two years seems like an eternity but it will pass.  During those two years you should be doing the following:

Learn as much as you can in the area you want to invest in.

Learn how to market yourself via social media and build a network of investors.

Find some other cash based business you can dabble in like gumball machines.  No joke, it will teach you people skills, selling, follow up, budgeting, risk management, and making business focused decisions. All skills transferable to investing. Cost of entry is not significant and with 10 machines you could earn passive 200 or more a month depending on location.

Get a part time job that is close to what you want to do and learn. So if you want to flip homes, most high schools have a program you can earn credit with other students building homes.  If you want to go into rentals, see if you can find work for some complex, a wholesaler, a job working for an agent could be help you learn.

Save money

Locate a mentor, not some guru you pay for but a real person with success in what you want to do.  See if there is any assistant like work you could do for that mentor to add value and learn as you go. Like running around every Friday and Sunday putting up and taking down bandit signs or cold calling prospects or list/lead generation.

Learn accounting and book keeping, just do it, start now.

Dan Sheeks · Answer

Hey @Leah Alfred

Congrats to you for your ambition! I work with a bunch of young aspiring real estate investors just like you (in a free online group), and I am willing to help you out with some advice or even chat on the phone if you wish. But I first recommend you read this article I wrote for Bigger Pockets titled How to Invest in Real Estate Before Turning 21. Once you've read it, let me know your thoughts and if you have any questions. I am a high school teacher in Colorado and I am always looking to help young people get started in real estate investing or help in any way I can. Let me know if you want to chat sometime. https://www.biggerpockets.com/

Yuuj V. · Answer

And because Grant Cardone says it, it must be true! Just invest with him, Cardone Capital! I like Uncle GC, and his books/message, but he does peddle people to invest in him. Can't hate his hustle.

Now, for the OP,

Welcome to the forums.

First things first, congratulations on coming to the conclusion so many of us have come to.

Before you start, you need to learn, and learn, and learn. Did I say learn? Here are some actionable steps for you, starting today.

Be a sponge and absorb all things real estate. Watch Youtube videos, read books, listen to podcasts. Download books on Audible. Have a few minutes on your bus ride? You better be watching youtube videos or reading books. I burn through audible books on my 45 minute commute to work. I call it Highway University.

To start - as a starting point, have you read/listened to Brandon Turner's Book on Rental Property Investing? That was my first RE book and it opened doors for me to whats possible. Second, since you are young, I suggest reading a book on personal finance, such as Set For Life by Scott Trench. That was my second RE book, and it's playbook/framework laid the foundation for me.

A more advanced book: The millionaire Real Estate Investor by Gary Keller. Probably my favorite book, a little advanced, but teaches you about money, and not just real estate. Worth every dollar.

Also, a personal finance favorite, Rich Dad Poor Dad by Robert Kiyosawki. Foundational knowledge you should know at a young age. I read/listen to it once a year as a refresher, and the information is invaluable. It's one of the books I 'wish' I read at 16. It would have changed a lot for me. But I digress.

Now that's out the way,

You can consider REIT's as well, traded on the public stock exchange or REIT's that are non-traded like Fundrise.com (I invest in both) as well as Real Estate. If you don't know what a REIT is, theres something you can google and Youtube to get a better understanding of it. (hint hint, if you don't know something, you should read up on it and get a better understanding of it. Don't always expect 'the answer' up front from anyone, especially on forums. People will do their best to help and provide information (BP is famous for this), but ultimately it's up to you to dig and dig deep. Do the leg work and research. I keep a running journal of stuff I just happen to find.

Now to address what you can do between now and in the future.

There is truth that RE has a 'high barrier' to entry. That is, not everyone can invest in real estate because of the capital it takes to invest. (Thats where REIT's come in). Your area, market, city, state will determine that. I personally invest out of state (technically out of country). I invest in markets I can afford as my home state would cost me an arm and a leg.

But, you should, and I say this wholeheartedly, learn skills or a job that produces high income or find a way to get more income (shopify store?). Web development, IT Support, Sales (big time), or other high income jobs will make this journey easier and quality of life better. A cashier will have a harder time putting a downpayment on a home versus a Financial Accountant or Salesperson whose income can range between $50,000 - $75,000 or $85,000. Of course your lifestyle will play a role in this. (Avoid spending money on junk)

Heck, you can even consider shadowing a Real Estate Agent at a real estate company to learn some new skills. Of course you'd have to find one. (put in the work)

Anyways, I hope this post was insightful.

The one thing I regret the most, is not learning sooner. School and University have their place, but personal education and personal development is where the rubber meets the road. I wish I had read books much sooner than when I started.

Edit:

On last thing I forgot -

Keep that same energy and motivation, over the long term. I see a lot of people get hype and give their reasons and desires as well as their famous "I will become rich" speech, but fizzle out over time. Success is consistent positive actions taken over the long term. Over the summer, try and score a shadow or internship at a RE Agency. Just walk in and ask, or email them or whatever. I was lucky enough to score a high income skill summer internship at 16. (IT field). And it has since paid the bills, and paid me back 100x.

Maybe your school has a counselor that can assist, or resources. COVID has really made it tough to do anything, but you'll never know unless you try.

Lewis Tse · Answer

Hi Leah, Welcome to the Forum. I know it's insanely difficult to conceptualize for you now. However, it is doable. Learn and take up any opportunity that comes your way even remotely related to Real Estate. Through consistent practice, you will build up discipline to do the "smart work". For example, Deal Analysis requires critical thinking and reverse engineering. Those skills cannot be brute-forced by working hard. After you accumulate knowledge and practice enough to the point it's easier for you to accomplish your tasks than to fail them, reflect on what you learned by networking with other like-minded people (on this forum especially). The next two steps are "thinking of solutions" and "active experimentation". These steps only matter if you bother to reflect on your results and practice enough.

This is Cycle of 4 which creates a feedback loop for you to continue improving at what you want to do (which is investing in real estate).

Experience - Concrete Experience (Hard Work)Reflection - Reflective Observation (Studying Competition)Thinking - Abstract Conceptualization (Find Solutions/Trade-offs)Applying - Active Experimentation (Sliding Scale of Adjustment)

You're still 16 so I understand that's a lot to take in. Focus on the first step which is to learn as much as you can. Set expectations that you will fail because that is the only way to succeed.

I'm an agent in Upper Manhattan, NYC specializing in rentals. Feel free to reach out if you wanna dip your toes a bit deeper. All the best!

Leah Alfred · Answer

@Nadia O., thank you so much for that!

Nadia O. · Answer

@Julius Chinn Chicken i agree. opening roth ira at a very young age could be exceptionally beneficial. no one mentions the freaking headache comes with owning RE. Dealing with entitled renters, discount rents, missed payments, yearly fixes, and so on. Especially now with evictions...don't get me started. I understand there's money/opportunity to be made so does investing. 2020 was the year to invest big in stocks & funds. Everyone who's in made easy money that year. AS a 16 yr old, i would advise to explore every aspects of investing in RE & stock market. Don't get caught in the glamour of purchasing homes. Unless you can afford class A & B in NY then go for it. I'll stay away from Class C & D. And to be able to afford those homes, you'll need lots of $$ to start.

Just like i advised my son, go to military & saves majority of paycheck money. Once he's out, he'll purchase multi-family unit in Class B area & house hack it. But meanwhile, he will pour $$ in growth stocks.

Julius Chinn · Answer

$15.00 per hour working McDonalds.  Pump whatever you can into a ROTH IRA, preferably MAX amount, preferably SandP type fund.  Do it till you finish Skool.  Maybe ease up on contributions-life happens.  EZ peasy $5,000,000 when you retire.  Spending power in 44 years , who knows get the $5,000,000 worry about it later..

I know veterans who are taking a break from RE now.  They have money just not interested in profiting $50 a door. Numbers are insanity......and beyond.

Alexander Szikla · Answer

Hi Leah, you have the right perspective and clearly the motivation to set yourself apart. At your age the best thing you can do is invest in your education. Don't ignore school although it is traditional. Get a good job and live below your means to stack some cash!

Don't be afraid to get exposure to RE as a side hustle both to acquire knowledge and make some money. Have you considered looking into property management or becoming an agent.

Once you have a down payment saved up ($25k to $50k should be sufficient) look into the FHA program.

If you can get a 4 unit plus basement, that would be ideal and create major cash flow and equity creation.

If you are looking for yield in the short run, Manhattan may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!

Leah Alfred · Answer

Thank everyone for all of your advice! It really opened my eyes to the possibilities. Greatly appreciated.

16 year old getting into real estate; advice?

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