Hi,

I'm 18 and still in high school. I'm looking to get my real estate license to sell properties but another interest of mine is getting started investing in real estate.

I'm a little confused though.

I've heard/read that you don't need money, credit, etc to invest in real estate. How is that? How would someone like me, 18 year old HS senior with just a part time job, get started investing in real estate? Don't you have to establish some credit atleast? How do people buy multiple properties?

Thanks for any advice you can give me.

if you got instant messenger feel free to IM me and i can help you out on your questions.

That's a myth. You definitely need money to invest in real estate! At the very least you need money for marketing, gas, and miscellaneous expenses.

There are several areas of real estate that don't require LARGE sums of your own money or credit.

Such as:
Wholesaling
Lease/Options
Partnering
Consulting
Managing

I buy multiple properties by making use of seller financing. Personally I've never had a seller ask about my credit. But lots ask me to put money down which causes a lot of laughter on my part!

dont forget sub2's

Alvin, I purposely left sub2s out because of the higher cash reserve you should have to guarantee your payment obligation.

Good for you at your young age! The 1st one is the toughest. There are 1st time buyer programs that would enable you to get your first home if you feel you can handle it financially. 100% financing is still pretty available to 1st time buyers.

Establishing credit is a bit tricky b/c FICO scoring is more complex than most folks realize.

Once you have a few tradelines and a mortgage history, it gets easier to get financing for other properties.

As a real estate broker and loan officer I don't think it's wise in most cases to jump into an investment property until you own your own home. Financing for investment properties is more expensive than for an owner occupied. I'd suggest getting yourself into a home of your own and then looking into investments.

I also think u r wise to get your real estate licesne. Buying investment properties is risky biz and the more you know the better. By far, the riskiest investment is vacant land yet many people just love the idea. Far more can go wrong w/raw land than a house deal believe it or not.

As a realtor you can get a feel for supply/demand in your area. Before you buy an investment property, it's important to know what you plan to do with it. Fix and flip? Great in a hot market, in many markets today, it's a disaster.

Financing for flips is xpensive, for vacant land plan on putting at least 50% down.

I think the most important thing is to really, really understand your investment. Once you have your own home, perhaps a nice place to start would be to investigate the rental market in your area, determine the rent to value rations and vacancy rates and perhaps buy a little rental.

Also you'll want to evaluate your handyman skills, can you fix up properties that need rehab or rentals to keep tenants from suing?

This may be a good time to look for a good, ethical lender as well who can guide you in establishing a credit history that will give you max buying power.

Good luck!

The Loan Diva

I'm sorry but I have to disagree with Loan Diva. Although it's fine to take the slow approach by buying your own property way below market value, fix it up, live in it for a few years, than rent it out or sell it and trade up. This cannot be your primary investment niche if you plan on actually being an investor.

#2 there's nothing risky about investing if you know what you're doing. All of the techniques I mentioned above carry little or no risk.

Loan Diva is clearly promoting institutional borrowing, which is fine for some situations, but extremely limiting if it's all you know.

At your age and presumably limited financial position, rehabbing and/or landlording are absolutely the WORST thing you could possibly do. Both require large cash reserves.

#3 owning your own home will actually slow down your investment plans. You should stay at home if at all possible and put all of your disposable income into marketing for wholesale or lease/option deals.

Once you get things rolling with the investment side of things, then continue to stay at home (if possible) and quit your regular job so you could put all of your time and energy into investing. Afer a few years you could buy your own home at your convenience, or better yet lease/option it (you can lease to own a MUCH nicer home than you can afford to buy in most cities these days.)

Your maximum potential has nothing to do with finding a good lender and everything to do with finding motivated sellers. Motivated sellers bring good deals and money is attracted to good deals.

I'll never forget the first time I found a highly motivated seller with a burned out home. Before I even had the place under contract I had buyers, investors and partners crawling out of the woodwork throwing money at me. Flipping that contract for a $10k profit in a week was a cake walk. I couldn't believe it!

The hard part is finding deals. Getting the financing once you do is easy.

"Finding the deals" boy isn't that the truth!

If the little books every wannabe investor read were that accurate and easy to make money everyone would be rich.

Why do you think these so called investment gurus sell there programs? It is not to help the public.It is to sell information,that is where the real money is at.Then they use these people as gophers to do the grunt work to find the good deals.

You could start off as the apprentice or grunt person for an local big investment company to learn the ropes.You won't make a killing but the real world experience will be great for you.You can also find the deals lock up the contract and wholesale it for a fee to cash investors.

Some investors have tons of money but don't have the time or know-how to find the deals.They will gladly pay you 10k to make 40k any day of the week.

good luck

how do you find the investors? is it important to join investor clubs? thanks for any info on finding a investor

I am little older, but still fairly young and eager to jump into investing too.

Honestly i wanted to get my license at 19 and test is prety hard and with certain life problems i got my license at 21.

The closer I get to the actual investment the more I understand that i am missing something...
I would suggest you do ALOT of research about realestate and learn how lending system work(different type of loans) It might be better if you go to Mortgage school instead of realestate although i would recomend both.

Basicly in my opinion the more you know the better chance you have make more money safer and faster!

And the idea of working for an investor and learning from him is a great idea. I would even do it for free as long as I get valuable knowledge from him!

I would suggest getting a full time job before you start. I have had to pay mortgages for up to 8 months before finding a renter.

Finding Investors.....

You will run across 100 people who claim to be investors before you will probably find your first real investor. Most are just wannabees or worst... speculators/ gamblers.

Real investors seem to find You rather than you finding them.

The best way for them to find you is to be working with other investors. Once you with in this COI you will typically have more than you can effectively service.

The real trick is how to get the first couple and that is most often done with having a investor friendly property deal ready... investors typically have little interest in traditional real estate or those procedures. You need understand what creative real estate is about and what tools are available and how to use them to make deals work.

If your only using traditional real estate techniques... you first have to go to some other point to start... you are unlikely to get to where your going from that spot.

Wasting time attempting to "find" deals is almost never productive... Finding a Way for Making a deal work is most productive.

I am a investor and a realtor, I own 30 some rentals and I rehab a decent amount of homes. If I had it to do over again at 18, I would follow what super realtor said " get involved in wholesaling and assigning real estate. With just a few good deals you will be running circles around the wages that even college graduates are making.

Now I dont know where your from but if housing is affordable I would learn the market and buy a home for yourself to live in with at least 20-30% equity built in. then after 2 years I would sell and buy another one (avoids capital gains), then I would do this over and over every 2 years until your married. You could keep moving but it gets a little harder then, but very possible and profitable.

Most Investor "Guru" information work and you can invest with no money and no credit. It is just extremely hard.

On the institutional side you can get 100% financing on properties but you need good credit and the property has to be in average or better condition. I recently had a loan product that did 100% No Doc but the rates and fees were outragious.

Check out some investor groups, find some partners, learn about hard money and invest.

Good luck
Danny

Could you elaborate on that please?

I'm 19 and that really caught my attention.