I’m looking for advice and some help as a 19 year old trying to step into real estate

[Alex Sotelo]

Im a 19 year old living in New York with some roommates and my girlfriend, I don’t spend too much on a unnecessary purchases and try to limit my spending. I currently work a job that pays about 18$/hr and I’m interested in learning how to acquire and grow passive income but have no basis. I’ve only recently tried to start reading about finances but still feel like I’m unsure on next steps. I’ve looked into MLM, and affiliate marketing as other sources of income but I’m really interested in Real Estate seeing as my small experience with the stock market was a bit confusing to say the least. I’ve looked into programs like lifestyles unlimited but am a bit hesitant since I don’t make a lot of money after taxes and expenses are said and done. So if anyone has any suggestions or help to offer Im open ears. I’ve been ideally looking into some sort of mentor ship but have no one around who has experience with those things.

[Jason Wray]

Alex,

Good to hear you are getting a head start into the REI world and thinking of the future! I will add my 2 cents and hopefully it helps you along the way. You have a job and your old enough to sign a contract to buy a home and get a mortgage, so thats a plus. Now you have to come up with a business proxy or a game plan in regard to time, money, and location. best way to start in the REI game is to land the first home and use the Primary home loopholes.

If you make enough money and have at least 3-3.5% for a down payment you can go FHA or Fannie/Freddie 1st time home buyer. Lower down payment and lower rates which will help keep the payment reasonable until you refinance down the road. You want to identify a home preferably a multifamily 2-4 units if possible. This will allow you to use the other units as income to help qualify for a bigger loan amount. This will also serve as great first rental when you move out of the home generally after 12 months and rent all units.

Prior to moving out you would want to refinance to take some cash out and lock in a low 30 year fixed rate. That money will allow you to take the next step and buy yet another home to restart the BRRR approach. If you do not have a down payment saved you can borrower from family or use a DPA -down payment assistance program. DPA can be through the county in which you reside or will live or DPA like SONYMA DPAL.

You want to get a Pre-approval by a Bank/Lender so that you know what you qualify for and talk about your plan/goals with your Banker/Loan Officer.  At this point you want to identify a seasoned real estate agent who will work with you and the Bank/lender to find the right house based on your Pre-approval.

Use Bigger Pockets to your advantage and lean on members for advice to avoid mistakes and pitfalls.  We are all here to help with any questions along the way.