I’m a 21 year old making 31,000 a year before taxes with student loans and no real positive credit activity (besides paying bills and having a bank account). I was wanting to get involved with real estate, but I dont think I would be able to qualify for a loan. Anyone have any idea about what would be the most viable (or easy!) method for me to begin investing (even in a small way) in the real estate market?
I think the most realistic method for me would be birddogging, but I’m not a realtor and have heard it would be illegal for me to charge a fee. Secondly, don’t you have BUY a house before you can assign the contract? Maybe I don’t know what that phrase means… a nice definition would help! Could I make these work? I’m looking for a way to move properties while avoiding the need for credit.
I’m most interested in flipping or wholesaling. Any tips? 8)
PS, my FICO score is 697
Read through the forums, especially birddogging and wholesaling. Assigning a contract is not illegal. You do not have to be a realtor to be involved with investing. Read through the free articles and glossary under the investor information section, and listen to the audios.
Realize that it will take some time to gain your real estate education. Keep paying your bills on time. Read all you can. Find your local REI club and attend the meetings. Network, ask questions, determine your REI focus, and your long-term goals.
Steve Cook and Vena Jones-Cox are great resources for wholesale info. Ben Innes Ker for Birdogging. Some things you can find on Ebay, others at the library. Get as much free education as you can, stick to your guns, and stay focused. May I also recomment ‘the Millionaire Mind’ By T. Harv Esker.
Good luck to you.
CC
a 697 score is not a bad place to start.
I also think at 21, 31k a year isnt too bad either.
Do you have your own home yet? IF not, consider buying a du/tri/quadplex where you can live and rent out the other side/s. I have heard this advise given to many people in your position. I also believe since you will be living there and its not an apartment, you can get normal financing.
Renting out a duplex seems like a great idea. Any tips on how to determine which ones are the best deal? How do you determine whether or not you would be able to fill the place with tenants? What rent should be charged based on the purchase price?
One issue I would raise with this would be the cost of purchasing the property up front, but maybe this would be offset by rent from tenants. Say I purchased a property for 200k… how much money would I realistically have to pay out of pocket (montly loan payments, fees, closing costs, etc) in order to own the property and begin renting it out?
Any ideas on how to maximize a deal like this? Should I look for an undervalued property that I can improve, or would that be too difficult given my financial situation? Again, I’m having trouble seeing how I would be able to buy a property with such a low income and no credit history to speak of without having to pay some major fees upfront. Any suggestions?
Malice, I don’t know where you live, but 200k on a 31 k salary is a drowner.
Choosing a lower cost property, you should be able to get incentives for 1st x buyer. See whether your city offers closing cost help or other programs. Ask the seller help or to fully pay closing.
Another method is to get an interest only loan, or a 10/1 arm; then refi later. Of course, buy below market.
Mortgages are usually qualified at 2.5 to 3 x your annual, so your max would be looking like $90k.
I’m not a mortgage broker, just speaking from experience.