How do I make sure I’m ready to get started at 18?

Question

I’m a 17 year old high school student in the Jackson, Mississippi area. I would like to get started in real estate soon after I turn 18 but would like to hear any tips anyone may have to get going. I’ve read many of the bigger pockets books on investing as well as some general finance books. Other than gathering knowledge, what can I do to help prepare myself for an acquisition when I’m 18?

Stephen Johnston · Answer

My advice would be to pick an area and make a list of every lender you can find (big banks, community banks, credit unions etc) and just start calling.

Something like this, "Hello, this is XYX Bank. Yes, can I talk to someone about getting a mortgage? I'm closing on a property soon and want to understand what mortgage products and terms you currently offer. (side note: each bank has a menu of mortgage products that they offer and regularly change depending on how they want to make changes to their loan portfolio.)

A lot of these will be generic canned answers and the person you are talking to won't really know what they are talking about but others will be incredibly insightful and give a full detailed response and you will get a masters class in the topic. Some will do all the talking and tell you everything, even to questions you didn't know to ask (this is valuable) other you will have to pull the answers out of them and ask tons of questions. After a few dozen calls you will get a picture of who offers what product and what products are available to buyers.

I recently did this for a house I purchased in Biloxi, MS. Created a spreadsheet with every lender I could find from NOLA to Mobile, maybe 50 total and just started calling and taking notes. It probable took me a week, but I learned so much that I never knew before! I actually needed to do it to find a lender for my purchase, but it's such a good exercise that I wish I would have done it much sooner. Let me know if you have any questions.

Scott E. · Answer

I started by getting my real estate right out of high school. While I never pursued that career due to I ended up becoming a loan officer shortly after getting licensed, I did find a lot of value in the real estate school at such a young age.

Regardless of your exact trajectory, just don't rush it. Might not feel like it right now, but trust me when I say that you have a LOT to learn. You might end up fumbling through your first deal at the age of 18, or 20, or 22. But regardless of exactly when it happens, you're going to be ahead of 99% of other people your age.

Try to find a local mentor who is much older and wiser, and shadow them for a while. They will show you the ropes, help you understand what to do and what not to do, and ultimately they will probably guide you through your first deal when it does come along.

Bruce Woodruff · Answer

You need money or someone else to give/loan it to you.

You need experience - get your RE license, volunteer at a RE office as an assistant, volunteer at a construction jobsite as a gofer or cleanup guy.

You need knowledge - and this is a great place to get it. Start learning and you will have questions...ask them on this forum.

Logan McKay Zylstra · Answer

You'll need a decent W2 or have someone cosign the loan. Your W2 doesn't need to make a lot of money, but you need to show a history of income.

Also, make sure that you start building credit. I would definitely open one in your name and get added to one of your parent's cards as an authorized user.

Dan Sheeks · Answer

Hey @Christian Dane CokerCongrats on your ambition!

Bigger Pockets recently published a book just for you (and all other teens). It's called First to a Million. You should check it out! If you have questions about the book, let me know. I am the author. :-)

In addition, DM me if you are interested in an online community of young, like-minded individuals.

Best of luck to you! Dan

Greg Henderson · Answer

The most important piece of advice is don't invest in low income areas of Jackson. They will leave in the night and take the hot water heater with them. Second, you cant buy property, without a cosigner, until you're 21 in Mississippi unless you're emancipated. Maybe that should have been number one... Either way.

"Give me six hours to chop down a tree and I will spend the first four sharpening the ax."Keep sharpening your ax. Read. Listen. Learn. Grow. Be Patient.

Travis Timmons · Answer

Work your a$$ off and make money. You may not have that much money, but you have a lot of time, which one could argue is a more valuable resource. For as many $0 down OMG I bought $8M of properties with no money! stories that are out there, you need to pile up savings, obtain a history of employment, and a buffer between you and emergencies.

Also, don't just rely on the stories that you tell yourself and conversations with others. Sit down with a mortgage broker, a real estate agent, and a local investor and get concrete numbers. We often have these ideas - good and bad - that are not based in reality. We just think that we can or can't do something based on our own random thoughts or conversations. If you know that you need 2 years of employment history, a certain debt to income ratio, a certain % down, credit score above X number, etc., then you can set actionable goals. If you're in Jackson, MS, the entry point to house hack a 2-4 unit property is reasonable. Since you would be living there, you could do a 3.5% down FHA loan and have tenants cover the cost of the mortgage (and hopefully make a few bucks).

Delbert Standifer · Answer

Congratulations on your pursuit. W2,credit and adequate savings.

How do I make sure I’m ready to get started at 18?

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